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SAM FRANCISCO PUBLIC LIBRARY 



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sis 




San Francisco Public Library 

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San Francisco Public Library 
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San Francisco, CA 94102 

REFERENCE BOOK 

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r /<^Sfe\ City and County of San Francisco „ c 'y" al 

|- $f jlKV \ * v 1 Dr. Carlton B. Goodlett Place 

1°- & l^Hyl Meeting Agenda San Francisco, CA 94102-4689 

I v|f||p / ^Finance Committee 

Jc L^ Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 

Clerk: Gail Johnson 

r is — — — — ^~~ — ~ ~~ —""■ ~ ^~~-"T— ■"■ ~~~~" — ~ ^ —— ~ ^ "■ ^- ^^^- ^^^^^— 
Monday, August 05, 2002 1 0:00 AM City Hall, Room 263 

Special Meeting 

Note: Each item on the Consent or Regular agenda may include the following documents: 

1) Legislation 

2) Budget Analyst report 

3) Legislative Analyst report 

4) Department or Agency cover letter and/or report 

5) Public correspondence 

These items will be available for review at City Hall, Room 244, Reception Desk. 



Each member of the public will be allotted the same maximum number of minutes to speak as set by 
the Chair at the beginning of each item, excluding City representatives, except that public speakers 
using translation assistance will be allowed to testify for twice the amount of the public testimony 
time limit. If simultaneous translation services are used, speakers will be governed by the public 
testimony time limit applied to speakers not requesting translation assistance. 



AGENDA CHANGES 
REGULAR AGENDA 



DOCUMENTS DEPT. 
AUG 2 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



City and County of San Francisco 1 Printed at 11:33 AM on 8/J/02 



Finance Committee Meeting Agenda Monday, August 05, 2002 

1. 021292 [Business Tax] 

Supervisor McGoldrick 

Motion submitting the San Francisco Business Tax Reform Ordinance 2002 to the qualified electors 
of the City and County of San Francisco, at the November 5, 2002 general municipal election. 

7/17/02. PREPARED IN COMMITTEE AS A MOTION. Continued to 7/24/02. See File 021 121 for prior versions. 

7/17/02. CONTINUED. 

7/17/02. RECEIVED AND ASSIGNED to Finance Committee. 

7/24/02, AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE. Heard in Committee. Speakers: 

Supervisor McGoldrick; Supervisor Peskin; Ed Harrington. Controller; Supervisor Daly. Supervisor Hall; Steven Cornell, 

President. Small Business Commission; Margaret Brodkin. Coleman Advocates for Children; Jim Mathias, S. F. Chamber of 

Commerce; Julie Van Nostem. Deputy City Attorney; Amy Laitinen. SEIU; John Cope, Hotel Council of S. F.; Todd 

Robinette. Equity Office Properties; Nathan Nayman. Executive Director. Committee on Jobs; Scott Hauge. Small Business 

Advocates; Clifford Waldeck; Howard Wallace, Local 250; Garret Jenkins; Margie O'Driscoll; Rebecca Vilkomerson, 

People's Budget; John Crapo, Director, S. F. Center for Economic Development; Jim Fabris. S. F. Association of Realtors; 

Dorji Roberts, Deputy City Attorney; Rolph Muller; Lane Andersson. Boston Properties. Larry Volentine; Michael Freeman, 

McCarthy Cook & Company; Patricia Bresslin, Golden Gate Restaurant Association; Ken Cleveland. Building Owners & 

Managers Association; Chris Boman; Roger Bazeley. Theodore Brown. 

Amendment of the Whole; Supervisor Daly withdrew his sponsorship; Supervisor McGoldrick added as sponsor. 

7/24/02, CONTINUED AS AMENDED. Continued to July 31, 2002. 

7/31/02. CONTINUED. Heard in Committee. Speakers: Brook Turner, Coaliiton for Better Housing; Dorji Roberts, Deputy 

City Attorney: Jim Fabris. San Francisco Association of Realtors; Rosie Byers, SEIU, Local 250; Margie O'Driscoll, Interim 

Director. San Francisco Institute of Architects; Julie Van Nostem, Deputy City Attorney; Supervisor McGoldrick. Richard 

Parker. Jim Mathias, San Francisco Chamber of Commerce; Ken Cleveland, Building Owners and Managers Association; 

Theodore Lakey, Deputy City Attorney; Leong Chow, SEIU; Nathan Nayman, Executive Director, Committee on Jobs; Janan 

New, Director, San Francisco Apartment Association; Mr. Wallace, San Francisco Labor Council. 

Continued to Special Meeting of Finance Committee on Monday, August 5, 2002. 



City and County of San Francisco 2 Printed at 1 1 :33 AM on 8/1/02 

3 1223 06446 5942 



Finance Committee Meeting Agenda Monday, August 05, 2002 

2. 021294 [Business Tax] 

Supervisor McGoIdrick 

Ordinance amending the Business and Tax Regulations Code to: (1) enact a new Article 12-A-l 
(Gross Receipts Tax Ordinance) to impose a gross receipts tax on persons engaging in business in San 
Francisco as a lessor of real estate; (2) amend Article 12-A (Payroll Expense Tax Ordinance) to (i) 
reduce businesses' taxable payroll expense by the amount of payroll expense attributable to their San 
Francisco business activities taxed under Article 12-A-l (Gross Receipts Tax Ordinance), (ii) 
conform Article 12-A (Payroll Expense Tax Ordinance) with the enactment of Article 12-A-l (Gross 
Receipts Tax Ordinance) and amendments to Article 6 (Common Administrative Provisions), (iii) 
repeal the $500 surplus business tax revenue credit set forth in Section 906E, and (iv) consolidate 
exemptions, definitions and other administrative provisions, as amended, that apply to Article 12-A 
(Payroll Expense Tax Ordinance) and other Articles of the Business and Tax Regulations Code, and 
place them in Article 6 (Common Administrative Provisions); (3) amend Article 12 (Business 
Registration Ordinance) to conform business registration requirements with the enactment of Article 
12-A-l (Gross Receipts Tax Ordinance) and amendments to Article 12-A (Payroll Expense Tax 
Ordinance) and Article 6 (Common Administrative Provisions); (4) amend Article 6 (Common 
Administrative Provisions) to (i) clarify common administrative provisions and conform them with the 
enactment of Article 12-A-l (Gross Receipts Tax Ordinance) and amendments to Article 12-A 
(Payroll Expense Tax Ordinance) and Article 12 (Business Registration Ordinance), (ii) consolidate 
exemptions, definitions and other administrative provisions that apply to Article 12-A (Payroll 
Expense Tax Ordinance), Article 12-A-l (Gross Receipts Tax Ordinance), Article 12 (Business 
Registration Ordinance) and other Articles of the Business and Tax Regulations Code, and (iii) 
eliminate the Board of Review; and (5) amend Section 501 of Article 7 to clarify the definition of 
"Permanent Residents" exempt from the tax on the transient occupancy of hotel rooms. 

7/17/02, RECEIVED AND ASSIGNED to Finance Committee. 

7/17/02, PREPARED IN COMMITTEE AS AN ORDINANCE. Continued to 7/24/02. See File 021097 for prior versions. 

7/17/02, CONTINUED. 

7/24/02. AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE. Heard in Committee. Speakers: 

Supervisor McGoIdrick: Supervisor Peskin: Ed Harrington. Controller; Supervisor Daly. Supervisor Hall; Steven Cornell, 

President. Small Business Commission; Margaret Brodkin. Coleman Advocates for Children; Jim Mathias, S. F. Chamber of 

Commerce; Julie Van Nostem. Deputy City Attorney; Amy Laitinen, SEIU; John Cope, Hotel Council of S. F.; Todd 

Robinette, Equity Office Properties; Nathan Nayman, Executive Director, Committee on Jobs; Scott Hauge, Small Business 

Advocates; Clifford Waldeck; Howard Wallace. Local 250: Garret Jenkins; Margie O'Driscoll; Rebecca Vilkomerson, 

People's Budget; John Crapo, Director, S. F. Center for Economic Development; Jim Fabris. S. F. Association of Realtors; 

Dorji Roberts. Deputy City Attorney; Rolph Muller; Lane Andersson, Boston Properties; Larry Volentine; Michael Freeman, 

McCarthy Cook & Company; Patricia Bresslin, Golden Gate Restaurant Association; Ken Cleveland. Building Owners & 

Managers Association; Chns Boman; Roger Bazeley, Theodore Brown 

Amendment of the Whole, Supervisor Daly withdrew his sponsorship. Supervisor McGoIdrick added as sponsor. 

7/24/02, CONTINUED AS AMENDED. Continued to July 31. 2002. 

7/31/02, CONTINUED. Heard in Committee. Speakers: Brook Turner. Coaliiton for Better Housing; Dorji Roberts. Deputy 

City Attorney; Jim Fabris. San Francisco Association of Realtors; Rosie Byers, SEIU, Local 250; Margie O'Dnscoll, Interim 

Director, San Francisco Institute of Architects; Julie Van Nostem, Deputy City Attorney; Supervisor McGoIdrick; Richard 

Parker. Jim Mathias, San Francisco Chamber of Commerce; Ken Cleveland, Building Owners and Managers Association; 

Theodore Lakey, Deputy City Attorney; Leong Chow, SEIU; Nathan Nayman, Executive Director, Committee on Jobs; Janan 

New, Director. San Francisco Apartment Association; Mr. Wallace, San Francisco Labor Council 

Continued to Special Meeting of Finance Committee on Monday. August 5, 2002. 

ADJOURNMENT 



City and County of San Francisco 3 Printed at 11:33 AM on 8/1/02 



Finance Committee Meeting Agenda Monday, August 05, 2002 

IMPORTANT INFORMATION 

NOTE: Persons unable to attend the meeting may submit to the City, by the time the proceeding 
begins, written comments regarding the agenda items above. These comments will be made a part of 
the official public record and shall be brought to the attention of the Board of Supervisors. Any 
written comments should be sent to Committee Clerk, Finance Committee, San Francisco Board of 
Supervisors, 1 Dr. Carlton B. Goodlett Place, Room 244, San Francisco, California 94102 by 5:00 
p.m. on the day prior to the hearing. Comments which cannot be delivered to the committee clerk by 
that time may be taken directly to the hearing at the location above. 



LEGISLATION UNDER THE 30-DAY RULE 



(Not to be considered at this meeting) 

Rule 5.42 provides that when an ordinance or resolution is introduced which would CREATE OR 
REVISE MAJOR CITY POLICY, the committee to which the legislation is assigned shall not consider 
the legislation until at least thirty days after the date of introduction. The provisions of this rule shall 
not apply to the routine operations of the departments of the City or when a legal time limit controls 
the hearing timing. In general, the rule shall not apply to hearings to consider subject matter when 
no legislation has been presented, nor shall the rule apply to resolutions which simply URGE action 
to be taken. 



There are no items now pending under the 30-day rule. 



City and County of San Francisco 4 Printed at 11:33 AM on 8/1/02 



Finance Committee Meeting Agenda Monday, August 05, 2002 

Meeting Procedures 

The Board of Supervisors is the Legislative Body of the City and County of San Francisco. The Board has 

several standing Committees where ordinances and resolutions are the subject of hearings at which members of 

the public are urged to testify. The full Board does not hold a second public hearing on measures which have 

been heard in committee. 

Board procedures do not permit: 1) persons in the audience at a Committee meeting to vocally express support 

or opposition to statements by Supervisors or by other persons testifying; 2) ringing and use of cell phones, 

pagers, and similar sound-producing electronic devices; 3) signs to be brought into the meeting or displayed in 

the room; 4) standing in the meeting room. 

Citizens are encouraged to testify at Committee meetings and to write letters to the Clerk of a Committee or to 

its members, City Hall, 1 Dr. Carlton B. Goodlett Place, Room 244, San Francisco, CA 94102. 

Agenda are available on the internet at www.ci.sf.ca.us/bdsupvrs.bos.htm. 

THE AGENDA PACKET IS AVAILABLE FOR REVIEW AT CITY HALL, ROOM 244, RECEPTION DESK. 

Board meetings are televised on channel 26. For video tape copies and scheduling call (415) 557-4293. 

Requests for language translation at a meeting must be received no later than noon the Friday before the 

meeting. Contact Ohn Myint at (415) 554-7704. 

AVISO EN ESPANOL: La solicitud para un traductor en una reunion debe recibirse antes de mediodia de el 

viernes anterior a la reunion. Llame a Erasmo Vazquez (415) 554-4909. 

(415) 554-7701 



I BY 



Disability Access 

Both the Committee Room (Room 263) and the Legislative Chamber are wheelchair accessible. The closest 

accessible BART Station is Civic Center, three blocks from City Hall. Accessible MUNI lines serving this 

location are: #47 Van Ness, and the #71 Haight/Noriega and the F Line to Market and Van Ness and the Metro 

stations at Van Ness and Market and at Civic Center. For more information about MUNI accessible services, 

call 923-6142. 

There is accessible parking in the vicinity of City Hall at Civic Center Plaza and adjacent to Davies Hall and the 

War Memorial Complex. 

The following services are available when requested by 4:00 p.m. of the Friday before the Board meeting: 

For American Sign Language interpreters, use of a reader during a meeting, or sound enhancement system, 
contact Ohn Myint at (415) 554-7704. 

For a large print copy of agenda or minutes in alternative formats, contact Annette Lonich at (415) 554-7706. 
The Clerk of the Board's Office TTY number for speech-hearing impaired is (415) 554-5227. 
In order to accommodate persons with severe allergies, environmental illness, multiple chemical sensitivity or 
related disabilities, attendees at public meetings are reminded that other attendees may be sensitive to various 
chemical based products. 



City and County of San Francisco 5 Printed at 11:33 AM on 8/1/02 



Finance Committee Meeting Agenda Monday, August 05, 2002 

Know Your Rights Under the Sunshine Ordinance 

Government's duty is to serve the public, reaching its decisions in full view of the public. Commissions, boards, 
councils and other agencies of the City and County exist to conduct the people's business. The Sunshine 
Ordinance assures that deliberations are conducted before the people and that City operations are open to the 
people's review. For information on your rights under the Sunshine Ordinance (Chapter 67 of the San Francisco 
Administrative Code) or to report a violation of the ordinance, contact Donna Hall; by mail to Sunshine 
Ordinance Task Force, 1 Dr. Carlton B. Goodlett Place, Room 409, by phone at (415) 554-7724, by fax at (415) 
554-7854 or by email at Donna.Hall@sfgov.org 

Citizens may obtain a free copy of the Sunshine Ordinance by contacting Ms. Hall or by printing Chapter 67 of 
the San Francisco Administrative Code on the Internet, at http://www.sfgov.org/bdsupvrs/sunshine.htm 

Lobbyist Registration and Reporting Requirements 

Individuals and entities that influence or attempt to influence local legislative or administrative action may be 
required by the San Francisco Lobbyist Ordinance [SF Campaign & Governmental Conduct Code Sec. 2.100] to 
register and report lobbying activity. For more information about the Lobbyist Ordinance, please contact the 
San Francisco Ethics Commission at 30 Van Ness Avenue, Suite 3900, San Francisco, CA 94102; telephone 
(415) 581-2300; fax (415) 581-2317; web site www.sfgov.org/ethics 



City and County of San Francisco 6 Printed at 11:33 AM on 8/1/02 




City and County of San Francisco Cit y Ha11 

^ J /~ 1 Dr Carlton B. Goodlert Place 

^Meeting Agenda San Francisco - CA 94102-4689 

^Finance Committee 

Members: ^Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 

Clerk: Gail Johnson 
Wednesday, August 07, 2002 1 2:30 PM City Hall, Room 263 

Regular Meeting 



Note: Each item on the Consent or Regular agenda may include the following documents: 
J) Legislation 

2) Budget Analyst report 

3) Legislative Analyst report 

4) Department or Agency cover letter and/or report 

5) Public correspondence 

These items will be available for review at City Hall, Room 244, Reception Desk. 



Each member of the public will be allotted the same maximum number of minutes to speak as set by 
the Chair at the beginning of each item, excluding City representatives, except that public speakers 
using translation assistance will be allowed to testify for twice the amount of the public testimony 
time limit. If simultaneous translation services are used, speakers will be governed by the public 
testimony time limit applied to speakers not requesting translation assistance. 

DOCUMENTS DEPT. 
AGENDA CHANGES 

AUG 2 2002 

SAN FRANCISCO 

REGULAR AGENDA 



021067 [Amending Public Works Code, Street Space Occupancy Permits; Modify the Fee Collection] 
Supervisors Peskin, Newsom 

Ordinance amending Public Works Code Sections 724 through 724.9 concerning street space 
occupancy permits to modify the fee collection structure, provide for fee refunds, assess nght-of-way 
occupancy costs, establish minimum notice requirements, and impose other related procedures; 
amending Traffic Code Section 33. 1A to replace existing provisions concerning special parking 
restrictions with a requirement that the Department of Parking and Traffic and Department of Public 
Works coordinate jurisdictional activities over street space occupancy permits. 

6/10/02, RECEIVED AND ASSIGNED to Budget Committee. 

7/10/02, TRANSFERRED to Neighborhood Services and Recreation Committee. 

7/22/02, SUBSTITUTED to Neighborhood Services and Recreation Committee. Supervisor Peskin submitted a substitute 

ordinance bearing new title. 

7/23/02, TRANSFERRED to Finance Committee. Sponsor requests this item be calandered on August 7. 2002 



City and County of San Francisco > flifi at 1:21 I'M on 8/1/02 



Finance Committee 



Meeting Agenda 



Wednesday, August 07, 2002 



021184 [Airport Concession Lease] 

Resolution approving the North Terminal Candy Store Lease between See's Candies, Inc. and the City 
and County of San Francisco, Acting by and through its Airport Commission. (Airport Commission) 

7/2/02. RECEIVED AND ASSIGNED to Finance Committee. 



021230 [Airport Concession Support Program Lease] 

Resolution approving the Airport Concession Support Program between Action Cellular-Cellular 
Phone Rental Service Lease; Andale SFO - New International Terminal Food and Beverage Lease; 
Bank of America - Domestic Banking Services Lease; Bayport Concessions LLC dba Willow Street 
Woodfired Pizza - New International Terminal Food and Beverage Lease; Books, Inc. - North 
Terminal Bookstore Lease; Buth-Na-Bodhaige, Inc. dba The Body Shop - Boarding Area "F" 
Cosmetic and Toiletries Lease; CalStar Retail, Inc. - Boarding Area "F" Newsstand Lease and North 
Terminal Candy Cart/Kiosk Lease; Clear Channel Airports - Airport Advertising Program Lease and 
SFO Cyber Room Technology Showcase Lease; D. Mitchell Concessions dba Harry Denton's - New 
International Terminal Food and Beverage Lease; D-Lew Enterprises dba II Fomaio - New 
International Terminal Food and Beverage Lease; Deli-Up Enterprises, LLC - New International 
Terminal Food and Beverage Lease; Discovery Channel Stores - New International Terminal Nature 
Theme Store Lease; Ebisu, Inc. - New International Terminal Food and Beverage Lease; Emporio 
Rulli - New International Terminal Food and Beverage Lease; Fung Lum Express, LLC - New 
International Terminal Food and Beverage Lease; Gotham Foods Two, LLC dba Firewood Cafe - 
New International Terminal Food and Beverage Lease; Harbor Airport, LLC dba Harbor Village - 
New International Terminal Food and Beverage Lease; Host International, Inc. - North Terminal 
Concession Opportunity Lease, Boarding Areas "B" and "C" Bookstores Lease, New International 
Terminal Aviation Store Lease, and North Terminal Hub Principal Retail Concession Lease; Lori's 
Diner International - New International Terminal Food and Beverage Lease; Nidal Nazzal dba Burger 
Joint - New International Terminal Food and Beverage Lease; North Terminal Shines - Shoeshine 
Service Lease; OSI-MB-Boarding Area "F" Executive Writing Instruments Lease; Pacific Gateway 
Concessions, LLC - Boarding Areas "B" and "C" Principal Retail Concession Lease; Pacific Golf 
Partners, LLC - New International Terminal Golf Shop Lease; Polk-Townsend and Associates dba 
Cafe Metro - New International Terminal Food and Beverage Lease; Rosedale-Wilsons dba Wilsons 
Leather - North Terminal Concourse Fine Leather Goods Lease; San Francisco Museum of Modern 
Art - New International Terminal Museum Store Lease; See's Candies, Inc. - North Terminal Candy 
Store Lease (upon execution of the Lease); SFO Hairport - New International Terminal Hair Salon 
Lease; Smarte Carte - Public Lockers and Over-the-Counter Baggage Lease; Tomokazu Japanese 
Cuisine (SFO), Inc. - New International Terminal Food and Beverage Lease; Travelex America, Inc. - 
ATM Lease A in the New International Terminal, ATM Lease B in the New International Terminal, 
and Foreign Currency Lease; U-Threads - Boarding Area "F" Collegiate Apparel Lease; WH Smith 
Hotel Services - New International Terminal Bookstore/Cafe Lease; and Yoko, Inc. dba Osho 
Japanese Cuisine - New International Terminal Food and Beverage Lease; and the City and County of 
San Francisco, Acting by and through its Airport Commission. (Airport Commission) 

7/12/02. RECEIVED AND ASSIGNED to Finance Committee. 



ADJOURNMENT 



City and County of San Francisco 



Printed at 1:21 PM on 8/1/02 



Fina nce Committee Meeting Agenda Wednesday, August 7, 2002 

IMPORTANT INFORMATION 

NOTE: Persons unable to attend the meeting may submit to the City, by the time the proceeding 
begins, written comments regarding the agenda items above. These comments will be made a part of 
the official public record and shall be brought to the attention of the Board of Supervisors. Any 
written comments should be sent to Committee Clerk, Finance Committee, San Francisco Board of 
Supervisors, 1 Dr. Carlton B. Goodie tt Place, Room 244, San Francisco, California 94102 by 5:00 
p.m. on the day prior to the hearing. Comments which cannot be delivered to the committee clerk by 
that time may be taken directly to the hearing at the location above. 



LEGISLATION UNDER THE 30-DAY RULE 



(Not to be considered at this meeting) 

Rule 5.42 provides that when an ordinance or resolution is introduced which would CREATE OR 
REVISE MAJOR CITY POLICY, the committee to which the legislation is assigned shall not consider 
the legislation until at least thirty days after the date of introduction. The provisions of this rule shall 
not apply to the routine operations of the departments of the City or when a legal time limit controls 
the hearing timing. In general, the rule shall not apply to hearings to consider subject matter when 
no legislation has been presented, nor sluill the rule apply to resolutions which simply URGE action 
to be taken. 



There are no items now pending under the 30-day rule. 



City and County of San Francisco 3 Printed at 1:21 PM on 811102 



Finance Committee Meeting Agenda Wednesday, August 07, 2002 

Meeting Procedures 

The Board of Supervisors is the Legislative Body of the City and County of San Francisco. The Board has 

several standing Committees where ordinances and resolutions are the subject of hearings at which members of 

the public are urged to testify. The full Board does not hold a second public hearing on measures which have 

been heard in committee. 

Board procedures do not permit: 1) persons in the audience at a Committee meeting to vocally express support 

or opposition to statements by Supervisors or by other persons testifying; 2) ringing and use of cell phones, 

pagers, and similar sound-producing electronic devices; 3) signs to be brought into the meeting or displayed in 

the room; 4) standing in the meeting room. 

Citizens are encouraged to testify at Committee meetings and to write letters to the Clerk of a Committee or to 

its members. City Hall, 1 Dr. Carlton B. Goodlett Place, Room 244, San Francisco, CA 94102. 

Agenda are available on the internet at www.ci.sf.ca.us/bdsupvrs.bos.htm. 

THE AGENDA PACKET IS AVAILABLE FOR REVIEW AT CITY HALL, ROOM 244, RECEPTION DESK. 

Board meetings are televised on channel 26. For video tape copies and scheduling call (415) 557-4293. 

Requests for language translation at a meeting must be received no later than noon the Friday before the 

meeting. Contact Ohn Myint at (415) 554-7704. 

AVISO EN ESPANOL: La solicitud para un traductor en una reunion debe recibirse antes de mediodia de el 

viemes anterior a la reunion. Llame a Erasmo Vazquez (415) 554-4909. 

mm &m&&mmm&m-hsi'mmiHM£ 

§fft (415) 554-7701 



Disability Access 

Both the Committee Room (Room 263) and the Legislative Chamber are wheelchair accessible. The closest 

accessible BART Station is Civic Center, three blocks from City Hall. Accessible MUNI lines serving this 

location are: #47 Van Ness, and the #71 Haight/Noriega and the F Line to Market and Van Ness and the Metro 

stations at Van Ness and Market and at Civic Center. For more information about MUNI accessible services, 

call 923-6142. 

There is accessible parking in the vicinity of City Hall at Civic Center Plaza and adjacent to Davies Hall and the 

War Memorial Complex. 

The following services are available when requested by 4:00 p.m. of the Friday before the Board meeting: 

For American Sign Language interpreters, use of a reader during a meeting, or sound enhancement system, 
contact Ohn Myint at (415) 554-7704. 

For a large print copy of agenda or minutes in alternative formats, contact Annette Lonich at (415) 554-7706. 
The Clerk of the Board's Office TTY number for speech-hearing impaired is (415) 554-5227. 
In order to accommodate persons with severe allergies, environmental illness, multiple chemical sensitivity or 
related disabilities, attendees at public meetings are reminded that other attendees may be sensitive to various 
chemical based products. 



City and County of San Francisco 4 Printed at 1:21 PM on 8/1/02 



Finance Committee Meeting Agenda Wednesday, August 07, 2002 

Know Your Rights Under the Sunshine Ordinance 

Government's duty is to serve the public, reaching its decisions in full view of the public. Commissions, boards, 
councils and other agencies of the City and County exist to conduct the people's business. The Sunshine 
Ordinance assures that deliberations are conducted before the people and that City operations are open to the 
people's review. For information on your rights under the Sunshine Ordinance (Chapter 67 of the San Francisco 
Administrative Code) or to report a violation of the ordinance, contact Donna Hall; by mail to Sunshine 
Ordinance Task Force, 1 Dr. Carlton B. Goodlett Place, Room 409, by phone at (415) 554-7724, by fax at (415) 
554-7854 or by email at Donna.Hall@sfgov.org 

Citizens may obtain a free copy of the Sunshine Ordinance by contacting Ms. Hall or by printing Chapter 67 of 
the San Francisco Administrative Code on the Internet, at http://www.sfgov.org/bdsupvrs/sunshine.htm 

Lobbyist Registration and Reporting Requirements 

Individuals and entities that influence or attempt to influence local legislative or administrative action may be 
required by the San Francisco Lobbyist Ordinance [SF Campaign & Governmental Conduct Code Sec. 2.100] to 
register and report lobbying activity. For more information about the Lobbyist Ordinance, please contact the 
San Francisco Ethics Commission at 30 Van Ness Avenue, Suite 3900, San Francisco. CA 94102; telephone 
(415) 581-2300; fax (415) 581-2317; web site www.sfgov.org/ethics 



City and County of San Francisco 5 Printed at 1:21 PM on 8/1/02 



FINANCE COMMITTEE 

S.F. BOARD OF SUPERVISORS 

CITY HALL. ROOM 244 

1 DR. CARLTON GOODLETT PLACE 

SAN FRANCISCO. CA 94102-4689 

IMPORTANT HEARING NOTICE!!! 



0.A5 



l-i/ox 



CITY AND COUNTY 




OFSANFR. 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



BOARD OF SUPERVISORS 



BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



August 1, 2002 



TO: ..Finance Committee 

FROM: ^Budget Analyst 

SUBJECT: August 7, 2002 Finance Committee Meeting 



Item 1 - File 02-1067 



Departments: 



Item: 



Description: 



DOCUMENTS DEPT. 
AUG 7 2002 

SAN FRANCISCO 
PUBLIC LIBRAR/ 



Department of Public Works (DPW) 
Department of Building Inspection (DBI) 
Department of Parking and Traffic (DPT) 

Ordinance (a) amending Public Works Code Sections 724 
through 724.9 concerning street space occupancy permits 
to change the fee collection structure, provide for fee 
refunds, assess right-of-way occupancy costs, establish 
minimum notice requirements, and impose other related 
procedures; and (b) amending Traffic Code Section 33. 1A 
to replace existing provisions concerning special parking 
restrictions with a requirement that the Department of 
Parking and Traffic (DPT), Department of Public Works 
(DPW) and the Department of Building Inspection (DBI) 
coordinate jurisdictional activities over street space 
occupancy permits. 

Currently, the Department of Building Inspection (DBI) 
and the Department of Pubhc Works (DPW) are jointly 
responsible for the issuance of street space occupancy 
permits. Street space occupancy permits are issued to 
individuals, construction contractors and telecommunicat- 
ions related construction companies to reserve public 
parking spaces for use during the course of construction 
projects. Such street space occupancy permits establish 
no-parking zones, which permit holders are authorized to 
use for the delivery and storage of their supplies and 



Memo to the Finance Committee 

August 7, 2002 Finance Committee Meeting 



materials. Typically, these no-parking zones reserve 
street space fronting the construction site from property 
line to property line. DPT and DPW are jointly 
responsible for enforcing these no-parking zones. 

Currently, permit holders pay one-tenth of one percent of 
the value of the construction project for a street space 
occupancy permit, with a minimum fee of $30. The street 
space occupancy permit is valid for a period of either (a) 
four months for small construction jobs that do not 
require a building permit or (b) the duration of the 
building permit issued to the permit holder by DBI. 

The proposed ordinance would amend the Public Works 
Code, to: 

• Establish a new fee structure, including assessing 
right-of-way occupancy costs and providing for fee 
refunds. As noted previously, the current street space 
occupancy permit fee is one-tenth of one percent of the 
construction project value regardless of the length of 
the permit and the amount of space reserved. The 
proposed ordinance would change the fee structure, 
requiring the permittee to pay for street space on a per 
space (up to 20 linear feet and eight feet wide) per 
month basis. This proposed fee is broken into two 
parts: (1) a street space occupancy permit fee and (2) a 
public right-of-way occupancy assessment. The permit 
fee would be $10.45 per month per 20 linear feet or 
fraction thereof, and the public right-of-way 
assessment would be $29.55 per 20 linear feet, totaling 
$40 per space per month for up to 20 linear feet. DPW 
would calculate the fee in one-month increments even 
though the permittee may occupy the space for less 
than one month. 

• Modify Public Works Code Section 724.7 and 724.8 to 
allow for two types of additional street space 
occupancy: short and long term additional street space 
occupancy permits. Currently, street space occupancy 
permit holders may apply for additional street space 
beyond the maximum eight feet wide, 20 linear feet 
long, public parking space by petitioning the Director 
of Public Works or the Board of Supervisors 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
2 



Memo to the Finance Committee 

August 7, 2002 Finance Committee Meeting 



(depending on the length of occupancy) for a $500 
petition processing fee and a $10 or $40 per square 
foot annual assessment depending on the height 
restrictions of the area. 1 Presently, the petition 
process for additional street space applies to requests 
for additional street space occupancy regardless of the 
length of the permit. 

The proposed ordinance also provides both short and 
long term additional street space occupancy permits, 
which reserve space beyond 20 linear feet for such 
purposes as large deliveries and crane shortage. For 
short-term occupancy permits, the proposed ordinance 
would allow permit holders to reserve additional street 
space for $50 per day, regardless of the size of the 
space requirement. Such additional short-term street 
space occupancy permits could be granted for a 
maximum period of two weeks. As previously noted, 
the current Public Works Code requires a petition to 
the Director of Public Works with a $500 petition 
processing fee and a $10 or $40 per square foot 
additional annual assessment fee, regardless of the 
length of the permit. 

For long-term occupancy permits, under the proposed 
ordinance the applicant would be charged a processing 
fee of $353 instead of the current $500 fee, a reduction 
of $147 or 29.4%. Long-term occupancy permit 
applicants would also be required to pay an 
assessment charge of either $4.00 per square foot per 
month or $10.00 per square foot per month depending 
on the project's location, reduced from the existing $10 
and $40 annual per square foot assessment charges 
previously described. 2 



1 In areas zoned for buildings 80 feet in height or greater, DPW currently charges $40 per sq. ft 
annually. In areas zoned for buildings less than 80 feet in height, DPW currently charges $10 per 
sq. ft. annually. 

2 The assessment cost shall be as follows: (a) for a building in Planning Code height district of 80 
feet or less, the cost shall be $4 per additional square foot of occupation per month and (b) for a 
building in Planning Code height district of greater than 80 feet, the cost shall be $10 per additional 
square foot of occupation per month. For purposes of calculating the assessment costs, the 
Department shall use one-month increments even though the permittee may occupy the space for 
less than a one-month term. For the purpose of calculating the assessment cost, requests for 
extensions of permits would be treated as new applications. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
3 



Memo to the Finance Committee 

August 7, 2002 Finance Committee Meeting 



• Increase the fee for temporary street space occupancy 
for any purpose other than a building construction 
operation, from $30 to $50 per day, not exceeding a 
two week period. 

• Delete Traffic Code Section 33. 1A, which allows the 
public to park in no-parking zones after 12 p.m. in 
residential areas if construction work has not begun, 
and replace it with a program that requires DPT and 
DPW to develop a memorandum of understanding 
(MOU) between DPT and DPW to define the 
responsibility of each department in implementing and 
enforcing the proposed ordinance. 

• Provide that, beginning in FY 2003-2004, the permit 
fee and street space occupancy assessment will be 
adjusted each year by the Consumer Price Index, as 
determined by the Controller, without further 
approval by the Board of Supervisors. 

Under the proposed ordinance, street space occupancy 
permits would be restricted from the current 24 hours per 
day occupancy for the term of the permit to 7:00 a.m. to 
6:00 p.m. seven days a week allowable occupancy, unless 
otherwise authorized by the Director of Public Works. A 
permit holder who desired to modify a permit would be 
charged a new $50.00 fee. Additionally, the subject 
ordinance would establish a process for permittees to 
obtain refunds for projects that finish one month or more 
ahead of schedule. 

Comments: 1. Attachment I, submitted by Ms. Tina Olson of DPW, 

identifies the existing fees, the proposed fees, the actual 
FY 2001-2002 revenues and the projected FY 2002-2003 
revenues. In FY 2001-2002, total actual revenues were 
$1,300,000. Based on an effective date of October 1, 2002 
when the proposed legislation would be implemented, the 
projected FY 2002-2003 revenues are estimated to be 
$4,533,621. On an annual basis, the proposed fees are 
anticipated to generate a total of $5,511,495, which is 
$4,211,495 or 324 percent more than current annual 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to the Finance Committee 

August 7, 2002 Finance Committee Meeting 



revenues of $1,300,000. As noted above, the proposed 
ordinance authorizes the Controller to adjust these fees in 
future years based on the Consumer Price Index (CPI), 
without subsequent Board of Supervisors approval. 

2. In November 2001, the Legislative Analyst's Office 
(File 01-1628) conducted an evaluation of the subject 
street space occupancy fees which revealed that neither 
DPW nor DPT consistently enforce (1) whether the subject 
no-parking zones have current street space occupancy 
permits and (2) whether such spaces are used properly by 
permit holders. The evaluation found that because DPW 
and DPT do not consistently enforce street space 
occupancy permits, permit holders have the opportunity 
to use their reserved street space for employee parking, 
which is not allowed under the Traffic Code, Section 33.1 
and the Public Works Code, Section 72. 

DPW is proposing to revise the street space occupancy 
program to: (1) improve the coordination between DPW, 
DBI, and DPT; (2) change the fee setting rules to provide 
incentives for contractors to minimize their use of public 
street space; (3) clarify the signage to include a DPW 
contact telephone number; and (4) increase DPWs 
inspection staff and related expenditures to improve 
enforcement of the subject street space occupancy 
permits. 

3. In FY 2001-2002, street space occupancy permit fees 
charged by DPW generated approximately $1,300,000 
compared to the cost of DPWs issuance and enforcement 
expenditures of $679,934. Therefore, the City's revenues 
collected from these street space occupancy permits 
currently exceeds the City's costs by approximately 91.2 
percent. According to Mr. John Malamut of the City 
Attorney's Office, the City's fees cannot exceed the City's 
costs of providing sendees pursuant to Proposition 13 
under the California Constitution, Article 13A. 

4. As shown in Attachment II to this report provided by 
Ms. Olson, the proposed new program is estimated to cost 
an additional $765,179 on an annualized basis, for a total 
estimated annual cost of 81,445,113 ($679,934 existing 
costs plus 8765,179 new costs). Ms. Olson notes that in 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

5 



Memo to the Finance Committee 

August 7, 2002 Finance Committee Meeting 



FY 2002-2003, based on an October 1, 2002 start date, the 
costs would be approximately $1,412,716, including 
$209,000 of one time costs. According to Ms. Olson, the 
$10.45 per space fee portion of the proposed street space 
occupancy permit cost is estimated to generate $1,445,113 
in revenues on an annualized basis, which will fully 
recover the total program costs of $1,445,113. 

5. In addition to the street space occupancy permit fee of 
$10.45 per space, which will result in full cost recovery, 
the proposed ordinance would institute a monthly rent or 
occupancy assessment, of $29.55 per parking space per 
month. According to Ms. Olson, based on historical use, 
this proposed occupancy assessment is estimated to 
generate approximately $4,066,383 annually. As noted 
above, overall, these two fees would generate 
approximately $5,511,495 annually ($1,445,113 fee 
revenues + $4,066,383 occupancy assessment revenues). 
According to Mr. Malamut, the proposed $29.55 
assessment would be a legal assessment. 3 

6. Although the proposed ordinance has not yet been 
approved by the Board of Supervisors, an appropriation of 
$1,412,716 is included in the FY 2002-2003 DPW budget 
to cover the estimated DPW expenses in FY 2002-2003. 
In addition, the FY 2002-2003 budget included two 
technical adjustments approved by the Board of 
Supervisors, which appropriated a total of $3,120,905 of 
the projected new street space occupancy fees and 
assessment revenues. Of this $3,120,905 appropriation, 
$741,370 was appropriated for additional DPW 
expenditures and $2,379,535 was appropriated to fund 
other General Fund expenditures. Therefore, the total 
projected revenues of $4,533,621 from the subject 
legislation have been appropriated in the FY 2002-2003 
budget. 



3 According to Mr. Malamut, the fee assessed for occupation of the pubhc right of way should not 
exceed the fair market value of such property. According to Ms. Olson, the $40 per month charge 
($10.45 plus $29.55) is below the market value for street space, which DPT estimates at $198 per 
month (average monthly revenue DPT receives from a parking meter is $9 per day x 22 days per 
month = $198). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
6 



Memo to the Finance Committee 

August 7, 2002 Finance Committee Meeting 



According to Ms. Pamela Levin of the Controller's Office, 
of the $4,533,621 appropriation based on the projected 
revenues to be generated from the proposed new fees, 
$3,156,890 of expenditures have been placed on reserve 
by the Controller in the FY 2002-2003 budget, pending 
approval of the subject legislation. 

7. According to the Office of the Sponsor, the intent of the 
subject ordinance is to encourage contractors to reserve 
the minimum amount of on-street parking required for 
construction projects in order to provide the maximum on- 
street parking to the public. Traffic Code, Section 33.1 
and Pubhc Works Code, Section 724 do not allow permit 
holders to park any vehicles in the reserved spaces. 
Under the proposed ordinance, these provisions would not 
change. However, as noted above in Comment 2, such 
parking restrictions are currently not enforced. Under 
the proposed ordinance, additional enforcement and 
towing of illegally parked permit holder vehicles would be 
implemented. As shown in Attachment II to this report, 
the FY 2002-2003 budget includes an additional 2.5 FTEs 
(2 Street Inspectors and a .5 Senior Clerk Typist) for such 
enforcement. 

8. The Budget Analyst notes that street space occupancy 
fee and occupancy assessment revenues are likely to be 
less than the total estimated revenues of $4,533,621 in FY 
2002-2003 if increased enforcement and towing of permit 
holders' vehicles result in decreased demand for street 
space occupancy permits. 

9. According to Ms. Olson, DPW's revenue projections 
anticipate constant demand for street space occupancy 
permits. However, Ms. Olson states that DPW cannot 
accurately estimate with certainty the impact that the 
increased fees and the additional enforcement will have 
on the demand for street space permits. Mr. Rosenfield 
agrees with the Budget Analyst that the deterrent effect 
of the proposed legislation may affect revenue collection. 
Mr. Rosenfield states that the Mayor's Budget Office will 
work with DPW and the Controller to monitor actual 
revenue collections during the course of the fiscal year 
and adjust spending levels should such adjustments be 
required. Therefore, the Budget Analyst recommends 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
7 



Memo to the Finance Committee 

August 7, 2002 Finance Committee Meeting 



that in April of 2003 the Board of Supervisors review the 
actual revenues collected for the six months ended March 
31, 2003 (the new fees begin October 1, 2002). 

Recommendations: 1. Direct DPW to report to the Board of Supervisors on 

the status of the revenue collections and related 
expenditures in April of 2003. 

2. Although it should be noted that the City' FY 2002- 
2003 budget was approved based on the implementation 
of the proposed fees, approval of the subject ordinance is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

8 



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Attachment II 



Attachment II 



Total Additional Labor and Non-labor Costs 
Expanded Street Space Management Program 



Inspection Labor 
Class Title 



Annual Salary 
Quantity @ Step 5 + MFBs 



FTE 



Total 



6230 Street Inspector 
1426 Senior Clerk Typist 



$74,194 
59,001 



Inspection Labor Total 
Sign Sales Labor & Database Support 
Class Title 



Annual Salary 
Quantity @ Step 5 + MFBs 



2 

0.5 



2.5 



FTE 



$148,388 
29,501 



$177,889 



Total 



1426 Senior Clerk Typist 



1 



Supervision & Sign Sales Labor Total 



59,001 



0.5 



0.5 



29.501 



$29,501 



Total - DPW Labor Estimate 

Overhead 02019 Dept OH at 18.31% 
Overhead 02029 Division OH @ 27.61% 

DPT (1408 Pr. Clerk and OH @ 45.92%) 

COWCAP® 19.84% 

City Wide overhead cost allocation plan 

COWCAP on Existing Street Space Staff 



3.0 



0.25 



$207,389 

$37,973 
$57,260 

$23,426 

$116,613 

$75,467 



5518,129 | 



Total Labor + Overhead 



Non-Labor 

Application Development 
Hardware and Software 
Annual Maintenance 
Total Information Systems 

Equipment 

Trucks 

Total Equipment 



Qty 



Amount 



22,000 



$104,000 
61,000 
30,800 



Total 



44,000 



$195,800 



$44,000 



Cell Phones 

Digital Cameras 

Building Placards 

Total Materials and Supplies 

Total New Program Costs 
Total Existing Program Costs 



3,000 



2 


$125 


$25C 


2 


500 


1,000 


D 


2 


6,000 



$7,250 

765,179 
679,934 



Total Program Costs 



1,445,113 



Source: DPW, July 26, 2002 
Contact: Ms. Tina Olson 



10 



Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 

Item 2 -File 02-1184 



Department: 
Item: 



Location: 
Purpose of Lease: 

Lessor: 

Lessee: 

No. of Sq. Ft.: 



Airport 

Resolution approving a new lease between See's Candies, 
Inc. and the City and County of San Francisco, acting by 
and through its Airport Commission, for See's Candies, 
Inc. to operate a candy store in the North Terminal of the 
Airport. i 

North Terminal of the Airport 

The proposed new lease would provide approximately 900 
square feet of space in the North Terminal for See's 
Candies to operate a candy store and two mobile carts, all 
selling candy. 

City and County of San Francisco, acting by and through 
its Airport Commission. 

See's Candies, Inc. 

Approximately 900 square feet of space. This includes the 
use of 600 square feet of permanent retail space near 
Boarding Area F (the "in-line store") and 150 square feet 
each for two mobile carts, or a total of 300 square feet. 
The carts are self-contained, non-motorized carts selling a 
limited selection of the candy available in the permanent 
store, to be set up in the North Terminal Hub and at 
Boarding Area F. This is the same amount of space 
leased by ABC Cigar, the current tenant selling See's 
candy as a distributor in the North Terminal. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 

Annual Rent 
Payable by See's 
Candies, Inc. to the 
Airport: 



The proposed lease would require See's Candies, Inc. to 
pay to the Airport the greater of either the Minimum 
Annual Guarantee of $850,000 for each year of the five 
year lease term (adjusted by the percentage increase in 
tbe Consumer Price Index), or a percentage of the lessee's 
gross rqvenues as follows: 

(a) 12 percent of gross revenues achieved up to and 
including $500,000; plus 

(b) 14 percent of gross revenues achieved from 
$500,000.01 up to and including $1,000,000; plus 

(c) 16 percent of gross revenues achieved over 
$1,000,000. 



Term of Lease: 



Right of Renewal: 

Utilities and Janitor 
Provided by Lessor: 



These percentages of gross revenue are tbe same as those 
required to be paid under the prior lease held by ABC 
Cigar. 

The term of the lease is five years. The prior lease for the 
North Terminal Candy Store, held by ABC Cigar, was 
also five years. According to Ms. Patricia Maitland of the 
Airport, commencement of the lease is contingent on 
Board of Supervisors approval, execution of the lease by 
the Airport Director and acceptance of the premises by 
the potential tenant. 

None 



The Lessee pays for the costs of all utilities and janitorial 
services. The prior lease, held by ABC Cigar, also 
required the lessee to pay for these costs. 



Tenant 
Improvements: 



See's Candies, Inc. would be required to invest a 
minimum of $250 per square foot to refurbish, redecorate, 
and modernize the interior and exterior of the subject 
permanent store space. This represents an investment of 
$150,000 for the 600 square foot store. The two mobile 
carts are not included in the improvement requirements, 
but their design is subject to the approval of the Airport. 
In the prior lease, held by ABC Cigar, the tenant was also 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

12 



Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



Description: 



required to invest a minimum of $150 per square foot for 
the permanent store. 

The proposed resolution would authorize a new five-year 
lease of 900 square feet to See's Candies, Inc. to 
accommodate a permanent store and two mobile carts 
selling. candy in the North Terminal. On July 17, 2001, 
the Airport Commission adopted a resolution awarding 
the North Terminal Candy Store Lease to See's Candies, 
Inc. (Resolution No. 01-0246) after a competitive bidding 
process (see Comment 1). According to Ms. Maitland, the 
prior tenant, ABC Cigar, also leased approximately 900 
square feet of space, and had been selling See's brand 
candies as a distributor of See's Candies. Due to 
retirement of its owner, ABC Cigar did not submit a bid to 
renew their lease, which expired on December 18, 2001. 
Ms. Maitland explains that See's Candies, Inc. has been 
operating the two candy mobile carts under a 30-day 
revocable operating agreement since April 1, 2002. 
Operation of the permanent store will not begin until the 
proposed lease is approved by the Board of Supervisors. 
Attachment I to this report is a memorandum from Ms. 
Maitland showing a summary of milestones for the See's 
Candies lease. 



Comments: 



1. According to Ms. Maitland, in May of 2001, the Airport 
issued Invitations to Bid to 170 firms, and nine potential 
bidders attended the Airport's pre-bid conference for 
further information on the concession and the bidding 
process. Three firms submitted Minimum Annual 
Guarantee bids as was required by the Airport. The 
percentage rents of gross revenues payable by the lessee 
were set by the Airport and were therefore the same 
percentages for all bidders. Of the three bidders, See's 
Candies, Inc. proposed the highest Minimum Annual 
Guarantee of $850,000 annually. The other bidders, 
DeLaVe-Vergilio and Ethel M, submitted bids with 
Minimum Annual Guarantees of $727,299.99 and 
$425,000, respectively. Attachment II to this report is a 
memorandum from Mr. Martin listing the Minimum 
Annual Guarantee bids. 



2. According to Ms. Maitland, under the prior lease, ABC 
Cigar occupied 900 feet of space, including 600 feet of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
13 



Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



permanent retail space and 150 feet for each of two 
mobile carts, or 300 square feet in total, for which ABC 
Cigar paid the greater of a Minimum Annual Guarantee 
of $624,00 per year over the five-year term of the lease 
adjusted annually by the Consumer Price Index, or the 
sum of (a) 12 percent of revenues up to $500,000, (b) 14 
percent of revenues from $500,000.01 to $1,000,000, and 
(c) 16 percent of revenue over $1,000,000, which are the 
same percentages of gross revenues required under the 
proposed lease. Further, as noted above, the proposed 
lease, for the same amount of space, requires See's 
Candies, Inc. to pay a Minimum Annual Guarantee of 
$850,0000. The proposed Minimum Annual Guarantee 
represents an increase of $226,000 annually, or an 
increase of 36.2 percent over the previous Minimum 
Annual Guarantee of $624,000. Under the proposed 
lease, See's Candies' gross revenues would need to exceed 
$5,500,000 1 per year in order for the Airport to receive 
percentage rent instead of the Minimum Annual 
Guarantee of $850,000. 

3. Ms. Maitland further explains that ABC Cigar 
exceeded the Minimum Annual Guarantee and paid 
percentage rent based on their gross revenues in each of 
the last five years, with the exception of 2001, when air 
travel dropped significantly due to the events of 
September 11. However, the amount of percentage rent 
paid by ABC Cigar never exceeded the Minimum Annual 
Guarantee (MAG) of $850,000 under the proposed lease 
with See's Candies, Inc. The following table lists the 
actual amount of rent paid to the Airport by ABC Cigar in 
each of the past five calendar years: 



1 $5,500,000 was calculated in the following manner: first $500,000 gross revenues realized 
by the proposed lessee at 12 percent ($60,000), plus second $500,000 gross revenues realized 
by the proposed lessee at 14 percent ($70,000), plus gross revenues over $1,000,000 totaling 
$4,500,000 realized by the proposed lessee at 16 percent ($720,000). $60,000 plus $70,000 
plus $720,000 equals the Minim um Annual Guarantee of $850,000. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

Ik 



Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



Year 


TvpeofRent Paid 


Actual Rent Paid 
bv ABC Cisrar 


1997 


Percentage Rent 


$634,989 


1998 


Percentage Rent 


$656,120 


1999 


Percentage Rent 


$656,016 


2000 


Percentage Rent 


$626,910 


2001 


MAG 


8624,000 



4. The Budget Analyst notes that the subject lease with 
See's Candies, Inc. would be modified by Item 3, File 02- 
1230, of this report to the Finance Committee. Under File 
02-1230, the Minimum Annual Guarantee on the North 
Terminal Candy Store Lease would be suspended until 
passenger departures return to 85 percent of the year 
2000 level for two consecutive months, and See's Candies 
would be granted the option to extend this lease by five 
years, exercisable one year prior to the end date of the 
subject lease. An analysis of the modified provisions of 
the See's Candies lease and the other Airport leases is 
contained in Item 3, File 02-1230. 



Recommendation: 



Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 



Attachment I 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 

MEMORANDUM 



TO: Matthew Stokes DATE: July 19, 2002 

Budget Analyst Office 

THROUGH: Patricia Maitland 

FROM: Sharon Perez 

SUBJECT: See's Candies Timeline - North Terminal Candy Store Lease 

Below is a summary of milestones for the North Terminal Candy Store Lease 

Bid Opening June 28, 2001 

Award of Lease to See's July 17, 2001 

Resolution submitted to B/S August 15, 2001 

B/S requires new format August 28, 2001 

WTC Attacks September 1 1 , 2001 

B/S notifies Airport that Resolution needs change September 18, 2001 

Resolution resubmitted September 26, 2001 
See's attempts to withdraw bid and B/S package is pulled September 27, 2001 

Correspondence exchanged and meetings conducted October 2001 - Jan 2002 

Concession Support Program approved by A/C February 19, 2002 

See's commence operation under 30-day permit April 1, 2002 

Resolution resubmitted to J. Caramatti June 12, 2002 

See's Candies currently operates two candy carts in Terminal 3, while undergoing the Design 
Review Process for the retail facility under a permit (PAC 3600). See's Candies will execute the 
North Terminal Candy Store Lease upon Board of Supervisors approval of the Concession Support 
Program. 



C:\windows\TEMF~ME0000E.doc 



16 



COMMISSIC 
1 iND CO.''. " 



r ltl:£ . dPOWN 



Attachment II 
Page 1 of 2 

San Francisco International Airport 




MEMORANDUM 



Julv 17,2001 



TO: AIRPORT COMMISSION 

Hon. Henry E. Berman, President 
Hon. Larry Mazzola, Vice President 
Hon. Michael Strunsky 
Hon. Linda S. Crayton 
Hon. Carvl Ito 



PO.Bot S097 

San Francisco. CA 9412S 

Tel 650.S21.500C 

Fax 650. SI":. 5005 
www.fivsfo.cor". 



o' san franco: FROM: Airport Director 

SUBJECT: Award of the North Terminal Candy Store Lease 

DIRECTOR'S RECOMMENDATION: AWARD THE NORTH TERMINAL 
CANDY STORE LEASE TO SEE'S CANDIES, INC. AND APPROVAL OF 
MONTH-TO-MONTH LEASE HOLDOVER FOR ABC CIGAR. 



Background 

By Resolution No. 01-0125. adopted April 17, 2001, the Commission approved the 
lease specifications and authorized staff to accept bids for the North Terminal Candy 
Store Lease. 

On June 28. 2001. Airport staff received bid submittals for the North Terminal Candy 
Store Lease. 

Bidder Amount 

See's Candies. Inc. S850.O00.O0 

DeLaVe-Vergilio S727.299.99 

Ethel M S425.000.00 

The highest successful bidder is See's Candies. Inc. Airport staff has reviewed the bid 
submittals and has determined that See's Candies. Inc. meets the minimum 
qualifications. 

17 
THIS PRINT COVERS CALENDAR ITEM NO 7 



Attachment II 
Page 2 of 2 



Members. Airport Commission 
July 17. 2001 
Page 2 



The current lease for the North Terminal Candy Store, to ABC Cigar, Inc, will expire on 
December 18, 2001. Due to high candy sales during the holiday season, ABC Cigar 
agreed to remain operational through the holiday season and provide this service to 
passengers. 



Recommendation 

I recommend adoption of the accompanying resolution that awards the North Terminal 
Candy Store Lease to See's Candies, Inc. and approval of month-to-month lease hold- 
over for ABC Cigar. 




John LTMartin 
Airport Director 

Prepared by: Bob Rhoades 



18 



Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 

Item 3 -File 02-1230 



Department: 
Item: 

Terms of Leases: 



Description: 



Airport 

Resolution approving the modification of 43 Airport leases 
under the Airport's Concession Support Program. 

Attachment I, provided by the Airport, contains a 
schedule of the location, square footage, Minimum Annual 
Guarantee and percentage of gross revenues payable as 
rent to the Airport, start date, end date, right of renewal, 
tenant improvement requirements, and utilities and 
janitorial responsibility provisions of each of 43 leases 
that are included in the Concession Support Program. 

This proposed resolution would approve the Airport's 
Concession Support Program in order to assist Airport 
concession lessees that have seen a decline in business 
due to reduced levels of air travel since the events of 
September 11, 2001. The Airport's Concession Support 
Program contains the following provisions: 

1. Minimum Annual Guarantee Suspensions . Most 
concession leases with the Airport require the tenant to 
pay either a percentage of their annual gross revenues or 
a Minimum Annual Guarantee (MAG), whichever is 
greater. The percentage rent varies by lease, as required 
by the Airport. The MAG is determined through the 
Airport's competitive bid process, and the lessee pays the 
Airport the greater of their MAG bid or the set percentage 
of gross revenues. Under the Airport's proposed 
Concession Support Program, the MAG for 27 of the 
subject 43 leases would be suspended, 26 of which have 
start dates in 1998 or later. (One lease, held by 
SmarteCarte, began in 1990 as explained below.) These 
27 lessees would pay the Airport rent based on a 
percentage of their gross revenues, even if the percentage 
of gross revenues rent is less than the rent that would be 
owed to the x^irport based on the previously approved 
MAGs required under the leases. The MAG provisions 
specified in each of the concession leases would be 
reinstated when the number of passenger departures per 
month are at or above 85 percent of the number of 
passenger departures in the same month from January 

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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



through December of 2000 for two consecutive months. 
For example, if the number of passenger departures in 
November and December of 2002 are both at least 85 
percent of passenger departures in November and 
December of 2000, respectively, then the MAG provisions 
would be reinstated, effective December, 2002. These 27 
leases are identified in Attachment I, along with the 
balance of 16 of the 43 leases that would not be relieved of 
their MAG requirements. These 16 leases include 15 
Food and Beverage leases in the International Terminal 
that, as previously approved, have low MAGs and 
generally pay percentage rent based on gross revenues, 
and one lease with the Bank of America, which did not 
receive a MAG suspension because the Airport considers 
it a "passenger service," which was not included in the 
MAG suspension provision, according to Mr. David 
Pfeiffer, Associate Deputy Director of Revenue 
Development at the Airport. 

In addition to these 43 leases, the Airport has 16 other 
leases that are not covered by the proposed resolution 
because those leases were executed prior to 1998. 
According to Mr. Pfeiffer, the Airport decided to include in 
its Concession Support Program only those lessees whose 
leases began in 1998 or later, except for the SmarteCarte 
lease as explained below. 

2. Option to Extend Lease . Under the proposed 
resolution, 42 of the 43 lessees in the Concession Support 
Program would be granted the option to extend their 
current lease by five years beyond the current terms of 
the lease. This option must be exercised at least one year 
prior to the termination date of the current lease. 
According to Mr. Pfeiffer, one lessee, SmarteCarte, which 
holds the baggage locker and over-the-counter baggage 
lease, would not be granted an option to extend their lease 
for five years because the lease began in 1990, 8 years 
before the Airport's 1998 cut-off date for participation in 
the Concession Support Program. Under the proposed 
resolution, the SmarteCarte lease would be granted a 
MAG suspension because the Federal Aviation 
Administration shut down all airport locker services 
nationwide indefinitely as a security measure. 



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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



3. In addition to the above two lease modifications 
(suspension of MAG and option to extend leases), six of 
the subject lessees (holding a total of eight leases) would 
have the following special conditions: 

(a) DFS Group. LLP Duty Free and Duty Paid lease 
modification . DFS Group, LLP holds the Post- 
Security 1 Master Retail Lease, which includes 
operation of the Airport's duty-free shop in the 
International Terminal. The lease also allows DFS to 
subcontract with Disadvantaged Business Enterprises 
for duty-paid leases. The duty-free shop sells goods 
without paying US customs duties or taxes to 
passengers departing the country, and the duty-paid 
shops sell normally taxed goods to any customer at the 
Airport. The duty-free and duty-paid shops are subject 
to a single MAG of $26,100,000 annually. Under the 
current lease, DFS pays the greater of either 
$26,100,000 annually or (a) 15 percent of all duty-free 
revenues up to $50,000,000; plus (b) 20 percent of all 
duty-free revenues between $50,000,000 and 
$100,000,000; plus (c) 25 percent of duty-free revenues 
above $100,000,000; plus (d) 12 percent of all duty- 
paid revenues up to $50,000,000; plus (e) 14 percent of 
all duty-paid revenues between $50,000,000 and 
$100,000,000; plus (f) 16 percent of duty-paid revenues 
above $100,000,000. According to Mr. Pfeiffer, rent 
paid by DFS has not exceeded the MAG during the 
term of the current lease, which began in December of 
2000. 

Under the Airport's proposed Concession Support 
Program, the MAG for the duty-free shop would be 
suspended until December 31, 2002, or until gross 
revenues at the duty-free shop exceed $5,000,000 for 
two consecutive months, whichever comes first. While 
the MAG is suspended, the duty-free shop would pay 
rent of 30 percent of all gross revenues, which is an 
increased percentage from the existing percentages as 
noted above. If the MAG for the duty-free shop is 
reinstated before the MAG for the duty-paid shop (see 



1 "Post-Security" refers to concessions in locations that can only be reached by passengers who have 
already gone through the security 7 screening checkpoint. Since September 11, 2001, only ticketed 
passengers may pass through the security checkpoints. 

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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



provision below), the MAG for the duty-free shop will 
be $23,490,000 annually, or 90 percent of the total 
MAG of $26,100,000. Once both the duty-free and 
duty-paid MAGs are reinstated, the total MAG will 
return to the original level of $26,100,000. 

The MAG for the duty-paid shop would be suspended 
until monthly passenger departures exceed 85 percent 
of the number of departures in the same month in 
2000 for two consecutive months. While the MAG is 
suspended, the duty-paid shop would pay percentage 
rent as specified in the existing lease, at the sum of (a) 
12 percent of all duty-paid revenues up to $50,000,000; 
plus (b) 14 percent of all duty-paid revenues between 
$50,000,000 and $100,000,000; plus (c) 16 percent of 
duty-paid revenues above $100,000,000. If the MAG 
for the duty-paid shop is reinstated before the MAG for 
the duty-free shop, the MAG for the duty-paid lease 
will be set at $2,610,000 annually, or 10 percent of the 
total MAG of $26,100,000. 

According to Mr. Pfeiffer, the DFS lease for duty-free 
and duty-paid retail services was designed with the 
lessee paying the greater of a large MAG of 
$26,100,000 annually, or percentage rent of the sum of 
(a) 15 percent of revenue up to $50,000,000, plus (b) 20 
percent of revenues between $50,000,000.01 and 
$100,000,000, plus (c) 25 percent of revenues above 
$100,000,000. Mr. Pfeiffer explains that given that 
current gross revenue levels for the duty-free shop are 
below $50,000,000 annually, when the MAG was 
suspended, rent payable would have dropped to 15 
percent of total revenues, remaining in the lowest tier 
of the percentage rent scale. This would reduce 
revenue for the Airport from the MAG of $26,100,000 
to below $7,500,000 annually, based solely on 15 
percent of gross revenues below $50,000,000. Mr. 
Pfeiffer explains that the renegotiated percentage rent 
of 30 percent on DFS sales of duty-free goods will 
generate more revenue for the Airport than just 
suspending the MAG and leaving the current 
percentage rent structure in place, while still 
providing DFS with some relief due to lower passenger 
traffic. Mr. Pfeiffer adds that this lessee was given an 

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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



explicit date for reinstatement of the prior MAG 
because international leisure travel from Asia, which 
is the duty-free shop's primary market, may not return 
to 2000 levels even if the overall number of passenger 
departures does return to 85% of 2000 levels, and the 
Airport cannot forego the significant revenue 
generated by the duty-free lease indefinitely. Mr. 
Pfeiffer explains that the duty-paid portion of the DFS 
contract covers Disadvantaged Business Enterprises 
subcontracting under DFS. The Concession Support 
Program would treat these duty-paid shops like the 
typical retail concessions, suspending the MAG and 
tying reinstatement to passenger traffic returning to 
85 percent of 2000 levels. 

The differing reinstatement conditions may result in 
the MAG for either the duty-free or duty-paid portion 
of the DFS lease being reinstated while the other 
remains suspended. According to Mr. Pfeiffer, in order 
to plan for this contingency, the Airport used past 
sales by the duty-free and duty-paid stores to establish 
separate MAGs for each. Mr. Pfeiffer explains that the 
Airport determined that the duty-free shop represents 
90 percent of sales, while the duty-paid stores 
represent only 10 percent of sales, and therefore set 
the duty-free MAG at $23,490,000, or 90 percent of the 
total MAG of $26,100,000, and set the duty-paid MAG 
at $2,610,000, or 10 percent of the total MAG. These 
MAGs will only be used if either the duty-free or duty- 
paid MAG is reinstated, while the other remains 
suspended, and the total MAG for the DFS lease will 
return to $26,100,000 once both the duty-free and 
duty-paid MAGs are reinstated. 

(b) Travelex Percentage Rent Structure Modifications . 
Travelex holds three leases at the Airport: two for 
Automated Teller Machines (ATMs) and one for 
Foreign Currency Exchange Services. These leases are 
structured differently from retail leases, and thei'efore, 
the proposed Concession Support Program treats these 
three leases differently. For each of the ATM leases 
(Lease A and Lease B), the existing lease sets rent at a 
MAG of $240,500 for each lease, plus 33 percent of 
transaction surcharges, plus $0.10 per customer use. 

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BUDGET ANALYST 

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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



The proposed resolution would change the rent 
structure temporarily to be strictly based on 
percentages of the fees charged. The annual rent for 
each lease would be the sum of (a) 35 percent of all 
fees for the first 32,000 transactions, plus (b) 50 
percent of all fees for the 32,000 th to the 50,000 th 
transaction, plus (c) 60 percent of all fees for 
transactions beyond the 50,000 th . From January 
through June of 2002, the ATMs covered under Lease 
A handled 27,087 surchargeable transactions, and 
those covered by Lease B handled 15,569 
surchargeable transactions. The MAG for the ATMs 
would be suspended until monthly passenger 
departures exceed 85 percent of the number of 
departures in the same month in 2000 for two 
consecutive months. 

For Travelex's Foreign Currency Exchange Lease, the 
existing lease does not include a percentage rent 
structure, but sets rent at a MAG of $4,127,500 
annually or $0.88 per international passenger 
departure. The proposed resolution would suspend the 
MAG until December 31, 2002 but would continue to 
require the $0.88 per international passenger 
departure. No percentage rents would be required. 

Mr. Pfeiffer explains that because of the unique nature 
of the businesses Travelex conducts at the Airport, 
including the operation of Automatic Teller Machines 
and Foreign Currency Exchanges, Travelex did not 
have a percentage rent structure in its leases with the 
Airport, and so the normal provisions of the 
Concession Support Program would not apply. The 
proposed program therefore establishes a percentage 
rent structure for each of Travelex's leases, enabling 
an alternative mechanism for determining rent while 
the current MAG is suspended. Rent payable for the 
Foreign Currency Exchange lease would be $0.88 per 
international passenger departure. The annual rent 
for each ATM lease would be the sum of (a) 35 percent 
of all fees for the first 32,000 transactions, plus (b) 50 
percent of all fees for transactions 32,001 to 50,000 
plus (c) 60 percent of all fees for transactions beyond 
50,000. Travelex rent payments to the Airport on its 

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BUDGET ANALYST 

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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



ATM leases during the Concession Support Program, 
which has already been implemented, have been only 
15 percent of what they would have been were the 
MAG not suspended. Mr. Pfeiffer attributes these low 
rent revenues for the Airport to particularly low gross 
revenues generated by Travelex. 

(c) Post-Security Food/Beverage Operators . The 
proposed program would change the percentage rent 
formula for three restaurants that are located beyond 
the passenger security screening checkpoint in the 
new International Terminal, namely, Andale SFO, D. 
Mitchell Concessions dba Harry Denton's, and Gotham 
Foods Two LLC dba Firewood Cafe, in order to match 
the percentage rent formula for other restaurants in 
the International Terminal. The current lease 
provision for percentage rent is the sum of (a) 12 
percent of gross revenues up to and including 
$600,000, plus (b) 14 percent of gross revenues 
between $600,000.01 to $1.5 million, plus (c) 16% of 
gross revenues over $1.5 million. 

The proposed resolution would authorize the Airport to 
change the formula for percentage rent for all three 
restaurant leases to the sum of (a) six percent of gross 
revenues up to and including $1,000,000, plus (b) eight 
percent of gross revenues between $1,000,000.01 to 
$1.5 million, plus (c) 10 percent of gross revenues over 
$1.5 million. 

Mr. Pfeiffer explains that the Concession Support 
Program would alter the percentage rent formulae for 
three post-security food and beverage concessions, 
bringing them in line with other restaurants in the 
International Terminal. Mr. Pfeiffer further explains 
that these concessions originally anticipated that 
profitable alcohol sales would comprise 70 percent of 
their business, while less profitable food sales would 
comprise 30 percent, and their leases were written 
accordingly. According to Mr. Pfeiffer, these three 
establishments were already receiving substantially 
less than 70 percent of their sales from alcohol before 
September 11, 2001. Mr. Pfeiffer further explains that 
after this date, only ticketed passengers could go past 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



the security checkpoints to these restaurants, and that 
the amount of alcohol sold in the International 
Terminal has dropped even further. The Concession 
Support Program will change then percentage rent 
structure to match with other establishments that 
primarily serve food, rather than alcohol. 

The Budget Analyst notes that the changes to the 
Post-Security Food and Beverage Operator leases 
would be permanent, with no sunset date and no 
reinstatement of the current lease terms once air 
passenger travel returns to 2000 levels. 

(d) Clear Channel Airport Advertising Lease . The 
proposed resolution would approve the Airport's plan 
to increase the MAG schedule for the Airport 
Advertising Program Lease held by Clear Channel to 
include a set annual MAG for each j^ear. Under the 
current lease, Clear Channel pays the greater of either 
the MAG of $4,050,000, adjusted annually by the 
Consumer Price Index, or 70 percent of gross revenues, 
whichever is greater. The MAG for this lease has 
already been temporarily suspended by the Airport 
under the proposed Concession Support Program, and 
Clear Channel has been paying the Airport 70 percent 
of gross revenues only. Under the proposed resolution, 
the MAG would be reinstated, and Clear Channel 
would resume payments of the greater of the 
$4,050,000 MAG, or 70 percent of gross revenues. 
However, instead of adjusting the MAG by the 
Consumer Price Index, the proposed program would 
set the MAG for future years as follows: The MAG 
would be set at the greater of 85 percent of the 
previous year's rent paid, or $4,100,000 for Lease Year 
2; $4,200,000 for Lease Year 3; $4,300,000 for lease 
year 4; and $4,800,000 for lease year 5. This results in 
an increased MAG provision for the Airport. Contrary 
to the other leases whose rent obligations are being 
relieved, Clear Channel's rent would increase because 
Clear Channel requested additional advertising space 
near the baggage carousels. In addition, Clear 
Channel would receive the option to extend the lease 
by five years, exercisable at least one year prior to 
termination of the lease. 

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BUDGET ANALYST 

26 



Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



According to Mr. Pfeiffer, the provision of the 
Concession Support Program, establishing a new 
schedule of yearly MAGs for the Airport Advertising 
Lease held by Clear Channel, reinstates the MAG for 
this lease, which had been suspended temporarily. 
Mr. Pfeiffer explains that the new MAG schedule 
increases the required rent payable to the Airport by 
Clear Channel in exchange for allowing 16 additional 
locations for advertising space near the baggage 
carousels and changing locations for an additional 31 
advertising spaces. Over the course of five years, the 
MAG would increase to $4,800,000, or 18.5 percent, 
over the current MAG of $4,050,000. 

Comments: 1. According to Ms. Mara Rosales of the City Attorney's 

Office, the Airport's proposed Concession Support 
Program has already been implemented by the Airport on 
a temporary basis, retroactive to September 11, 2001, in 
order to respond to what the Airport Commission viewed 
as a crisis situation. The proposed resolution would 
authorize the Airport Commission to formally continue 
the Airport's Concession Support Program. Attachment II 
to this report is a memo from Ms. Rosales explaining this 
matter. The proposed resolution should be amended to 
provide for retroactivity to September 11, 2001. 

2. According to Mr. Pfeiffer, the Concession Support 
Program was negotiated between the Airport and the 43 
lessees identified in Attachment I in response to the 
decrease in air travel after events of September 11, 2001. 
Mr. Pfeiffer explains that the lessee concessionaires 
requested relief due to reduced passenger traffic. Mr. 
Pfeiffer notes that three lessees have already closed stores 
at the Airport since September 11, 2001, prior to the 
completion of their current lease agreements, namely, 
CalStar, Inc. closed a wine store and a candy store, 
Western Motive closed a health food/drug store and a 
leather goods store, and Esprit closed a clothing store. 
Attachment III to this report is a memorandum from Mr. 
Leo Fermin, Associate Deputy Director of Finance at the 
Airport, further explaining the Airport's Concession 
Support Program. 



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BUDGET ANALYST 
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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



3. Mr. Pfeiffer explains that passenger traffic in 2002 is 
still below 2000 levels, and adds that because it is difficult 
to predict when passenger traffic will increase again, the 
Aii-port Commission did not set a fixed sunset date for the 
MAG suspensions. Mr. Pfeiffer explains that after 
discussions with the affected lessees, the Airport tied 
reinstatement of the MAGs to the return of passenger 
departures to 85 percent of the 2000 level for two 
consecutive months in the terminal where the concession 
is located. According to Mr. Pfeiffer, total passenger 
departures in May of 2002, the most recent month for 
which the Airport could provide statistics, were 22.8 
percent lower than in May of 2000, ranging from 29.2 
percent below 2000 levels in Domestic Terminal 1 to 5.3 
percent below 2000 levels in the International Terminal. 
Attachment V to this report is a schedule providing 
passenger traffic data from the Airport for the period of 
January 1, 2000 through May 31, 2002. Mr. Pfeiffer 
projects that passenger traffic will reach 85 percent of 
2000 levels during FY 2002-2003, but that a full recovery 
to 2000 levels may take four to five years. The Budget 
Analyst recommends that the Board of Supervisors 
request the Airport Director to submit a written report 
back to the Board of Supervisors on April 1, 2003, 
detailing the status of passenger traffic levels and its 
impact on the 43 subject leases. 

4. According to Mr. Fermin, the Airport budget for FY 
2002-2003 was adopted under the assumption that the 
Concession Support Program would be approved by the 
Board of Supervisors. Therefore, the budgeted concession 
revenues have been reduced accordingly. Attachment IV 
to this report, provided by Mr. Pfeiffer, is a schedule of 
the actual annual gross revenue and annual rent paid by 
each of the 43 lessees for each calendar year from 1999 to 
May of 2002. 

5. As explained by Mr. Fermin in Attachment III to this 
report, the Airport determined that MAGs would be 
reinstated when passenger enplanements return to 85 
percent of the amount of air passenger traffic in calendar 
year 2000. Mr. Fermin explains that calendar year 2000 
was selected as the comparison year because it was not 
affected by the economic downturn and the "dot.com bust" 

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BUDGET ANALYST 

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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



that contributed to declines in air travel in 2001. Based 
on analysis of monthly enplanement levels provided by 
the Airport and included as Attachment V to this report, 
total enplanements at the Airport in 2001 were 14.0 
percent lower than total enplanements in 2000. Average 
monthly enplanements from January through August of 
2001 were 7.7 percent lower than average monthly 
enplanements from January through August of 2000, 
while average monthly enplanements from September 
through December of 2001 were 26.4 percent lower than 
average monthly enplanements from September through 
December of 2000. For January through May of 2002, 
average monthly enplanements were 22.7 percent lower 
than January through May of 2001. These statistics 
suggest that while the events of September 11, 2001 have 
clearly exacerbated the economic downturn, some portion 
of the economic downturn was occurring prior to that 
date, and air passenger traffic levels were already 
declining. 

In the professional judgment of the Budget Analyst, in 
contrast with the events of September 11, 2001, the 
economic downturn prior to that date could be viewed as 
an accepted risk of doing business that all businesses 
face. Therefore, the Budget Analyst suggests that the 
Finance Committee may want to consider, as a policy 
option, changing the comparison year such that MAGs are 
reinstated if monthly passenger departures reach 85 
percent of the levels for the same month from September, 
2000 through August, 2001 for two consecutive months, 
instead of using January, 2000 through December, 2000 
as the baseline. 

6. Using statistics provided by Mr. Pfeiffer, the Budget 
Analyst calculates that for the eight-month period from 
October 1, 2001 through May 31, 2002, during which the 
Concession Support Program has been previously 
implemented, the Concession Support Program has 
resulted in reduced rent of $18,185,072 to the Airport 
from the subject 43 concessionaires, as a result of 
suspending the MAG requirements, resulting in an 
average monthly rental reduction of $2,273,134. On an 
annual basis, this would represent a reduction in rent of 
$27,277,608. However, this estimate may overstate the 

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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



lost rent to the Airport, because in the absence of the 
Airport's Concession Support Program, some of the 
concessions at the Airport might be unable to pay their 
rent, based on the existing MAG. Attachment VI to this 
report is the Airport's forecast of concession revenues for 
the Airport's 59 leases (43 covered by this resolution and 
16 not included under this resolution), assuming the 
Concession Support Program remains in effect. The 
Airport could not provide revenue projections limited just 
to the 43 subject lessees covered by the proposed 
Concession Support Program, but according to Mr. 
Fermin, the Airport expects that in FY 2002-2003, 
revenues for the subject 43 leases will increase slightly 
over those reported for FY 2001-2002. 

7. Mr. Pfeiffer explains that the proposed five-year lease 
extensions are intended to allow more time for the lessees 
to recoup initial investments for leases that started in 
1998 or later. Mr. Pfeiffer could not provide an estimate 
of the revenue impact of granting five-year extensions 
instead of conducting a new competitive bid process, but 
explains that since September 11, 2001, the market value 
of Airport concession leases has dropped, and that if the 
current lessees were not granted the five-year option to 
extend their leases, a new competitive bidding process for 
the expiring leases might result in bids which generate 
less revenue to the Airport. The Budget Analyst notes 
that most of the leases for which the Concession Support 
Program grants five-year options do not expire until 2005, 
and many do not expire until 2010, when air passenger 
traffic may have returned to levels that would make 
Airport concession leases economically attractive again. 
Therefore, conducting competitive bidding processes for 
such leases may increase revenues for the Airport when 
the current leases expire. Therefore, the Budget Analyst 
recommends that the Airport amend the proposed Airport 
Concession Support Program Agreement to delete the 
provision granting five-year options to extend the subject 
leases, and instead provide for term extensions on a 
month-to-month basis, not to exceed five years, in order 
that the Airport may conduct new competitive bidding 
processes when, in the Airport's judgment, such new 
competitive bidding would be feasible. 



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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 

Recommendations: 1. Amend the proposed resolution to provide for 

retroactivity to September 11, 2001, in accordance with 
Comment No. 1. 

2. Request the Airport Director to submit a written 
report to the Board of Supervisors on April 1, 2003, 
detailing the status of passenger traffic levels and its 
impact on the subject 43 leases, in accordance with 
Comment No. 3. 

3. In accordance with Comment No. 5, as a policy option, 
the Finance Committee may want to consider amending 
the proposed resolution to change the year used as the 
baseline for air traffic levels from calendar year 2000 to 
the 12 months from September, 2000 through August, 
2001, by making the following changes: 

Page 4, lines 8-10 , delete: "Reinstates the MAGs once 
monthly enplanements equal or exceed 85% of the 
enplanements for the same month in year 2000 for two 
(2) consecutive months." 

Insert: "Reinstates the MAGs once monthly 
enplanements equal or exceed 85% of the 
enplanements for the same month in the one-year 
period from September, 2000 through August, 2001 for 
two (2) consecutive months." 

4. In accordance with Comment No. 7, amend the 
proposed resolution to delete the provision granting all 
concessions options to extend leases by five years, and 
instead provide for lease term extensions on a month-to- 
month basis until such leases, in the judgment of the 
Airport, can be competitively bid, by making the following 
changes: 

Page 4. Lines 18-19 , delete: "Grants to the following 
tenants an option permitting them to extend the terms 
of their respective leases for one 5-year period due to 
the significant build-out costs incurred" 

Insert: "Grants the Airport Commission the option to 
offer the following tenants an extension of the terms of 
their current lease on a month-to-month basis, which 

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Memo to Finance Committee 

August 7, 2002 Finance Committee Meeting 



will continue for no more than five } r ears or until the 
Airport considers it appropriate to conduct a 
competitive bid process for the concession covered by 
the lease, whichever comes first:" 

Page 6, Lines 7-8 , delete: "Such option would be 
exercisable by the tenant on or before the date that is 
one year before the current lease expiration date." 

Insert: "Such option would be exercisable by the 
Airport on or before the date that is one year before 
the current lease expiration date." 

5. Approval of the proposed resolution, as amended, is a 
policy decision for the Board of Supervisors. 




/ Cr-^ 



Harvey M. Rose 



cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 



BOARD OF SUPERVISORS 
BUDGET ANALYST 
32 



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36 



City and County of San Francisco 

<£££^?k Dennis J. Herrera I 
City Attorney 




Attachment II 

Office of the City Attorney 

airport Division: 
Mara E. Rosales 
Airport General Counsel 



Direct Dial (650)821-5065 
E-Mail: m2ra.rosales@flysto.c0m 



MEMORANDUM 
PRIVILEGED & CONFIDENTIAL 



TO: 


Matthew Stokes • 




Budget Analyst Office .7 
Mara E. Rosales<V^p^ 


FROM: 




Airport General/Counsel 


DATE: 


July 24, 2002 


RE: 


Airport Concession Support Program Information Request 



Pursuant to your request, I am providing you with the following statement. 

In adopting the Airport Concession Support Program, the Airport Commission always intended 
to submit the same to the Board of Supervisors, given that most if not all of the affected leases 
are subject to Board approval. Giyen the crisis of September 1 1th, the Airport Commission 
needed to take urgent action to stabilize the Airport and the services provided to the traveling 
public. 

Accordingly, last fall, the Airport suspended, as a temporary measure, the Minimum Annual 
Guarantees of most tenants. This was a temporary' suspension until the Airport could determine 
the best reinstatement formulas, etc. At that time, the Airport alerted the Board of this temporary 
measure. Then, once the Airport stabilized its operations, the Airport Commission adopted the 
actual Program, and started working with the Finance Committee to get it calendared. 



M.E.R. 



San Francisco International Airport sInternaTionalTermna., 5tm floor • P.O. Box 6097 • San Francisco, CA 94129 
Reception (650)821-5050 • Facsimile: (550)821-5031 



37 



Attachment III 
Page 1 of 5 



San Francisco International Airport 



fDUiU f.L'U./ (JUS 




VIA FACSIMILE TO 415.252.0461 

DATE: . July 25, 2002 

TO: Matthew Stokes 

Budget Analyst's Office 

FROM: Leo Fermin (/xV^^ 

Associate Deputy Director, Finance 

RE: Airport Concession Support Program 



P.O. Box 8097 

Siin f ranciseo, CA M12S 

lei 6i0.83l.S00O 

raxbb0.M1.S00S 

ww/w.tlysln.r.om 



COMMISSION 
OTV *NO COLIN It 

or Ull FMNCISUI 

WILLIE I . RBOWN. I*. 



"INKY I <IEHM«N 

r-lfCilCCNT 

VlCf M»f Sl/>f KT 

MICM»EL 1 iTRUNSKY 

IINIM i CRAYTON 

(.AfcYL ITrt 



JOHN L MtRTlN 
4/KrOdf SKCCTOt 



This responds to Item No. 3 of your e-mail dated July 23, 2002 
requesting clarification on information provided on the Airport 
Concession Support Program. 

MAG Suspension/Reinstatement. Given the severe impact of 
the 9/11/01 incidents on the aviation industry, the MAG 
Suspension /Reinstatement Program was implemented to stabilize 
the concession program and minimize the probability of tenants 
going out of business due to the severe passenger decline. The 
concessionaires requested relief on lost sales when the Airport 
was closed and the reduced passenger traffic since. The tenants 
looked toward the Airport to provide relief. Although Congress 
provided tremendous relief to the all the airlines and other facets 
of the aviation industry, no relie f program was available to 
concessionaires nationwide. 

Under the program, MAGs are reinstated once monthly 
enplanements equal or exceed 35% of the enplanements for the 
same month in year 2000 for two consecutive months. Each 
enplanement comparison would be done by the "Relevant 
Boarding Area(s)." MAGS would not be suspended thereafter. 
However, in no event will MAG reinstatement occur before April 
1, 2002. This model was adopted because prior to 9/1 1 the 
concession tenants were already beginning to suffer from reduced 
sales because of the down turn in the economy caused by the 
implosion in the financial institutions as well as the bust with the 
dot. comers. These events had a greater impact on the Bay Area 
than other parts of the country. Therefore, it was decided that 
the base year 2000 would be a better indicator than 2001, as 
2000 was not impacted by both the dot.com bust and 9/ 1 1. 



33 



Paee 2 of 5 



Matthew Stokes 
July 25, 2002 
Pasie2 



The MAG recovery triggers were based on passenger traffic by 
Boarding Areas, since not all airlines would recover at the same 
rate. ,An airport management consulting firm, the John f. Brown 
Company, had forecasted that it would take approximately four 
to five years for air traffic to return to pre-9/ 1 1 levels. There 
were even concerns after 9/11 that some of the airlines may not 
survive in light of the magnitude of the attack and its effects on 
the aviation industry. At the request of the concessionaires, it 
was viewed that two months of consecutive enplanements 
measured against base year 2000 would represent some level of 
stabilization of enplanements for the boarding area. Since no one 
could determine how quickly the aviation industry would bounce 
back and if there would be further attacks, it was determine that 
MAG would not be reinstated prior to April 1, 2002. This would 
give the industry and the Airport a period of time to stabilize. 
The Airport Commission approved the Concession Support 
Program on 2/19/02. 

Lease Term Extensions. The option to extend leases for five 
years was offered to those newer concessions (post 1995) that 
had not yet been able to realize their initial investments and, 
therefore, were even greater impacted by the losses of revenue. It 
was viewed that given the uncertain condition compounded by 
new procedures in effect by the FAA that tenants would not be 
able to realize their initial investments as well as sales 
opportunities. It was determined that a longer lease term would 
help to offset this loss and also help local DBE tenants to survive 
and actually prevent foreclosure of their homes that they had put 
up as collateral for their loans. 

DFS Post-Security Master Retail Duty Free /Duty Paid Lease. 

In terms of financial contribution to concession revenue 
generated at the Airport, DFS is a significant tenant with a $26.1 
million. MAG. There was a tremendous need to stabilize the 
program at the Airport. Had the Airport utilized the percent of 
revenue scale specified in the lease for duty free goods, it is 
unlikely that DFS' rent payment would ever exceed 15% of Gross 
Revenues. By negotiating different terms and conditions, The 
Airport was able to stabilize the retail for the DBE subcontractors 
while securing a greater revenue sharing arrangement with DFS 
on duty free goods than was provided for in the lease. 
Additionally, duty free sales were further exasperated since duty- 
free sales are typically very dependent on the Japanese market, it 



30 



Page 3 of 5 



Maitheu' Stokes 
July 25. 2002 
Page 3 

was realized very early that the Japanese were not traveling to 
the San Francisco in light of 9/ 1 1 . 

Travelex. The majority of Tenant leases at the Airport consist of 
a rent structure that is the Minimum Annual Guarantee (MAG), 
or, a percentage rent, whichever is greater. The Concession 
Support Program provided for suspension of the MAGs and the 
payment of percentage rents as specified in the Tenant's 
respective leases. 

Travelex holds three leases with the Airport, two for Automated 
Teller Machine (ATM) services, and the Currency Exchange Lease. 
Travelex's leases contain rent structures that are conventional for 
such concessions, but dissimilar to the majority of the Airport's 
leases. 1 

The Airport's tenants requested rent relief due to the decrease in 
passenger traffic after September 1 l*. In an effort to stabilize 
the ATM and Currency Exchange concessions, as well as 
concessions under an equitable program, a percentage rent 
structure was devised for the Travelex ATM and Currency 
Exchange Leases during the MAG suspension period. 2 

Subsequent discussions with Travelex regarding the Currency 
Exchange Lease resulted in the determination that the rent 
structure contained in the lease of the greater of the MAG or $.83 
per enplaned international passenger was sufficiently similar to 
other tenants' leases to provide the relief intended by the 
Concession support Program. Additionally, the per passenger 
rent was found to be a self-correcting rent structure in the face of 
reduced passenger traffic. As a result, by Resolution No. 02- 
0072, the Airport Commission suspended Travelex's MAG for 



' The rent structure for the ATM leases is the sum of ATM Leases The rent paid by 
Travelex for the ATM leases is the sum of: (a) the MAG, plus b) 33% of Transaction 
Surcharges ("Percentage Rent), plus c) SO. 10 per customer use ("Transaction Rent"). 
The Travelex Foreign Currency Exchange Lease specifies that Travelex shall pay the 
greater of the MAG or SO. 88 per enplaned international passenger. 

2 The ATM percentage rent devised was 35% of the fees for to 32,000 surchargeable 
transactions; plus 50% of the fees for 32,000 to 50,000 surchargeable transactions; 
plus 60% of the fees for 50,000+ surchargeable transactions. The Foreign Currency 
percentage rent structure devised was 4.25% of SO to $50,000,000 in currency 
transactions; plus 5% of $50,000,000.01 to $60,000,000 in currency transactions; 
plus 5.25% over $60,000,000 in currency transactions. 



40 
ti ii _-Dc_oraco BW: 1 1 



Attachment III 
Page 4 of 5 



Matthew Stokes 
July 25, 2002 
Pase4 



Foreign Currency Exchange until December 31, 2002, and 
required Travelex to pay the Passenger-Based Fee of eighty-eight 
cents ($0.88) per Enplanement as specified in the lease. 

Post-Security Food and Beverage. Three food and beverage 
operators were focused on sale of food and the sale of liquor; 
therefore, the percentage rent structure was adjusted to be in line 
with other food-dominated restaurants. 



Clear Channel- Adverting Program Lease. The MAG levels have a 
step increase for each year of the lease starting at $4.05 million for 
Lease Year 1, $4.1 million for Lease Year 2, $4.2 million for Lease 
Year 3, $4.3 million for Lease Year 4 and $4.8 million for Lease Year 
5. MAG adjustments for Lease Years 2 through 5 can be adjusted 
upwards based upon the MAG or 85% of rent paid the year before, 
whichever is greater. At no time will the tenant pay less than the 
MAG per the schedule. Tenant agreed to reinstatement of MAG 
effective 4/1/2002 with the increase MAG listed above, both of 
which increased revenue to the Airport. Tenant pays the greater of 
the set MAG or 70% of all revenue generated, as part of the ongoing 
program to improve and increase the advertising program, which we 
previously advised the Board of Supervisors. 



cc: David Pfeiffer 
Teresa Rivor 
Cathy Widener 



41 



Attachment III 
Page 5 of 5 



AIRPORT COMMISSION 

SAN FR-VNCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 

INTEROFFICE MEMORANDUM 



TO: Matthew Stokes 

Budget .Analyst 
Board of Supervisors 

/ -^ 

Leo Fermin JL ■^^-'-~ 



DATE: 7/31/2002 



FROM: 

SUBJECT: Concession Support Program 



As you requested, this memo is to confirm that revenues submitted in the Airport Commission 
FY02/03 Budget assume that the Concession Support Program is in place. 



cc: Bob Rboades 
David Pfeiffer 
Mary Downey 



n.\mdowncy\BOSConcc:sionSupportPro£.Qoi: 



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44 



Attachment V 



Total Enplanements at SFO, by Month, 2000-2002 
Month Total Domestic International 



Jan-00 


1,355,225 


1,120,964 


234,261 


Feb-00 


1,350,724 


1,129,935 


220,789 


Mar-00 


1,626,209 


1 ,364,272 


261,937 


Apr-00 


1,654,526 


1 ,404,255 


250,271 


May-00 


1,738,683 


1,432,927 


305,756 


Jun-00 


1,959,181 


1,605,312 


353,869 


Jul-00 


1,952,090 


1,601,870 


350,220 


Aug-00 


1,951,702 


1,591,491 


360,211 


Sep-00 


1,664,717 


1,352,452 


312,265 


Oct-00 


1,708,986 


1,397,779 


311,207 


Nov-00 


1,604,562 


1,328,038 


276,524 


Dec-00 


1,599,519 


1,297,648 


301,871 


Total 2000 


20,166,124 


16,626,943 


3,539,181 


Jan-01 


1,366,711 


1,059,805 


306,906 


Feb-01 


1,256,991 


999,235 


257,756 


Mar-01 


1,490,228 


1,186,188 


304,040 


Apr-01 


1,519,317 


1,193,681 


325,636 


May-01 


1,582,955 


1,224,540 


358,415 


Jun-01 


1,732,846 


1,342,959 


389,887 


Jul-01 


1,701,638 


1,319,624 


382,014 


Aug-01 


1,843,794 


1,443,616 


400,178 


Sep-01 


1,122,594 


767,224 


355,370 


Oct-01 


1,258,793 


911,625 


347,168 


Nov-01 


1,210,640 


901,623 


309,017 


Dec-01 


1,248,181 


910,134 


338,047 


Total 2001 


17,334,688 


13,260,254 


4,074,434 


Jan-02 


1,094,147 


850,604 


243,543 


Feb-02 


1,019,790 


791,344 


228,446 


Mar-02 


1,277,372 


1,002,783 


274,589 


Apr-02 


1,228,930 


972,726 


256,204 


May-02 


1,343,030 


1,053,394 


289,636 


Jun-02 









45 



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0.35 

1 



CITY AND COUNTY 




[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



OF SAN FRANCISCO 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 



August 8, 2002 



TO: ,, Finance Committee 

FROM: ^udget Analyst 

SUBJECT: August 14, 2002 Finance Committee Meeting 

Item 1 - File 02-1313 



DOCUMENTS DEPT. 
AUG 1 5 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



Department: 
Item: 






Amount: 



Public Library 

Mayor's Office of Public Finance 

Resolution authorizing and directing the sale of not to 
exceed $23,135,000 City and County of San Francisco 
General Obligation Bonds (Branch Library Facilities 
Improvement Bonds, 2000), Series 2002B; prescribing the 
form and terms of said bonds; authorizing the execution, 
authentication and registration of said bonds; providing 
for the appointment of depositories and other agents for 
said bonds; providing for the establishment of accounts 
related thereto; approving the forms of official notice of 
sale and notice of intention to sell bonds; directing the 
publication of the notice of intention to sell bonds; 
approving the form and execution of the official statement 
relating thereto; approving the form of the continuing 
disclosure certificate; approving modifications to 
documents; ratifying certain actions previously taken; 
and granting general authority to City officials to take 
necessary actions in connection with the authorization, 
issuance, sale and delivery of said bonds. 

Not to exceed $23,135,000 



Memo to the Finance Committee 

August 14, 2002 Finance Committee Meeting 

Description: On November 7, 2000, San Francisco voters approved 

Proposition A, Branch Library Facilities Improvement 
Bonds, which authorized the City to issue up to 
$105,865,000 in General Obligation Bonds to: 

• Rehabilitate, renovate, and improve 19 of the 24 
existing branch libraries. This work includes seismic 
upgrades, improved disability access, mitigation of 
hazardous materials, modernizing and upgrading 
building systems, reconfiguration and expansion of 
interior spaces, and other improvements. 

• Acquire land and construct four new branch libraries 
currently housed in leased facilities in the Glen Park, 
Ingleside, Portola, and Visitacion Valley 
neighborhoods. 

• Construct one new branch library in the Mission Bay 
neighborhood. 

• Construct a new system-wide administrative support 
services center. 

Attachment I, provided by the Public Library, contains a 
list of all the projects to be funded by the Branch Library 
Facilities Improvement Bonds and their estimated costs. 
Total estimated project costs are $118,515,000. According 
to Mr. George Nichols of the Public Library, these total 
estimated project costs will be funded by: 

• Branch Library Facilities Improvement Bonds 
($105,865,000). 

• Earthquake Safety Program II funds ($2,400,000). 

• State Proposition 14 funds ($10,250,000). 1 

Mr. Nichols advises that construction and improvements 
of the branch libraries are scheduled for completion by the 
spring of 2010. All projects are on schedule at this time, 
according to Mr. Nichols. 



1 State Proposition 14, approved by the voters in March of 2000, provides $350,000,000 of State 
funds for library construction projects, which is awarded to libraries statewide on a competitive 
basis, and which requires a 35 percent local match. In January of 2002, the Public Library 
established a program reserve to cover the possibility that the State Proposition 14 funding allocated 
to San Francisco in the amount of $10,250,000 is not fully granted. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to the Finance Committee 

August 14, 2002 Finance Committee Meeting 



Attachment II, provided by the Public Library, contains 
the following information on each of the branch library 
facilities improvement projects: 

• Actual expenditures to date. 

• Anticipated additional expenditures. 

• Actual or estimated start date. 

• Estimated completion date. 

Although the sale of Branch Library Facilities 
Improvement Bonds, Series 200 IE in the amount of 
$17,665,000 was authorized by the Board of Supervisors 
in May of 2001, only $866,899 have been expended or 
encumbered, as noted in Attachment II. This is because 
the Branch Library Facilities Improvement Program 
start-up was delayed while the Public Library went 
through the process of hiring a program manager, 
according to Mr. Nichols. In terms of the sites for the 
new branch libraries and the System-wide 
Administrative Support Services Center, and the 
preliminary project designs, Mr. Nichols states that the 
initial project schedule was optimistic in terms of the 
amount of time it would take to survey available sites, 
develop the preliminary designs, obtain community input 
about the sites and preliminary designs, and obtain 
authorization to acquire the sites. Most of that work has 
now been completed and the Public Library is ready to 
move forward with the design review and approval and 
site acquisition stages of the projects, according to Mr. 
Nichols. 

Attachment III, provided by the Public Library, is a 
schedule of the anticipated dates when the remaining 
bonds of $65,065,000 will be sold ($105,865,000 less 
$17,665,000 for Branch Library Facilities Improvement 
Bonds, Series 2001E, and the proposed sale of 
$23,135,000 for Branch Library Facilities Improvement 
Bonds, Series 2002B). 

On May 14, 2001, the Board of Supervisors approved the 
general terms and procedures for the issuance of the 
$105,865,000 in Branch Library Facilities Improvement 
Bonds. The Board of Supervisors approved the following 
general provisions regarding issuance of these bonds: 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to the Finance Committee 

August 14, 2002 Finance Committee Meeting 

• The bonds shall be divided into various series, as 
authorized by the Board of Supervisors. 

• Property Taxes collected to pay debt service on the 
bonds would be deposited in a special account, which 
would be created specifically for this purpose. 

• The proceeds of the sale of the bonds would be 
deposited into a Project Account, maintained by the 
City Treasurer, and would be applied exclusively to 
the projects approved under the subject bond. 

• The City Treasurer may appoint fiscal agents or 
financial institutions to distribute bond interest and 
principal payments. 

• The Board of Supervisors may, by resolution, 
authorize and direct the sale of any series of bonds to 
provide for the defeasance of such series bonds. 
Defeasance refers to either the full repayment of the 
bonds or the advance refunding of bonds by placement 
of sufficient funds in an escrow account and purchase 
of high quality investments such that the resulting 
cashflow is sufficient to meet future debt service 
requirements. 

On May 14, 2001, the Board of Supervisors authorized the 
sale of the initial series of Branch Library Facilities 
Improvement Bonds, Series 2001E, in a principal amount 
not to exceed $17,665,000. These bonds were issued on 
July 12, 2001, at a 4.68 percent interest rate for a 20 year 
term, with a June 15, 2021 maturity date. 

The Public Library is now seeking Board of Supervisors 
approval to sell a second series of Branch Library 
Facilities Improvement Bonds. Branch Library Facilities 
Improvement Bonds, Series 2002B would be issued in an 
amount not to exceed $23,135,000. 

Budget: The Public Library proposes to expend the estimated 

$23,135,000 in proceeds from the Branch Library 
Facilities Improvement Bonds, Series 2002B as shown in 
the table on the following page: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to the Finance Committee 

August 14, 2002 Finance Committee Meeting 



Amount 


Architectural, engineering, and 


$3,937,418 


design services 




Construction 


952,500 


Site acquisition 


16,243,550 


Program management 


818,532 


Relocation and moving 


1,080,000 


Costs of issuance 


103.000 


TOTAL: 


$23,135,000 



Comments: 



Attachment IV, provided by the Public Library, contains 
the expenditure categories of the branch library facilities 
improvement projects and budget details to support the 
above summary budget for the subject bond proceeds of 
$23,135,000. Mr. Nichols advises that the budget 
information is based on preliminary estimates. 

1. According to Ms. Karen Ribble of the Mayor's Office of 
Public Finance, the sale of the General Obligation Bonds 
is tentatively scheduled for September 18, 2002. The 
bonds will have a term of approximately 20 years, with an 
anticipated final maturity date of June 15, 2022. The 
bonds would be awarded to the bidder whose bid 
represents the lowest true interest cost to the City. Based 
on current market estimates as of July 31, 2002, the 
overall effective interest rate on the proposed Branch 
Library Facilities Improvement Bonds, Series 2002B 
would be approximately 4.825 percent, according to Ms. 
Ribble. Under those circumstances, it is estimated that 
the proposed sale of bonds in the amount of $23,135,000 
would result in a total debt service over the 20 year life of 
the bonds of approximately $36,058,000, including the 
principal amount of $23,135,000 and interest payments of 
$12,923,000. The estimated average annual debt service 
over the estimated 20 year life of the bonds is 
approximately $1,802,000. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

5 



Memo to the Finance Committee 

August 14, 2002 Finance Committee Meeting 



2. According to the Controller's Office, the proposed 
Series 2002B sale of General Obligation Bonds in the 
amount of $23,135,000 would result in an increase in the 
Property Tax rate of approximately $0.00191 per $100 of 
assessed value. At that rate, the owner-occupier of a 
single-family residence assessed at $400,000 (net of the 
$7,000 homeowner's exemption) would pay approximately 
$7.64 in additional Property Taxes annually due to the 
issuance of these bonds. 

3. On June 3, 2002, the Board of Supervisors approved 
the sale of up to $6,210,000 in Zoo Facilities Bonds, Series 
2002A. Ms. Ribble advises that the Mayor's Office of 
Public Finance has decided to sell these Zoo Facilities 
Bonds at the same time as the proposed Branch Library 
Facilities Improvement Bonds, Series 2002B in order to 
reduce the City's bond issuance costs. Ms. Ribble advises 
that approximately $210,000 will be saved in bond 
issuance costs by selling both bond issuances 
simultaneously. Attachment V, provided by the Mayor's 
Office of Public Finance, details the bond issuance costs in 
the estimated amount of $210,000, or approximately 0.72 
percent of the total value of the bond sales in the amount 
of $29,345,000 ($23,135,000 for the Branch Library 
Facilities Improvement Bonds, Series 2002B, plus 
$6,210,000 for the Zoo Facilities Bonds, Series 2002A). 
Ms. Ribble reports that the bond issuance costs are to be 
paid from the bond proceeds. 

4. Ms. Ribble reports that, as of June 30, 2002, the City 
had $917,220,000 in outstanding General Obligation Bond 
debt. The City's General Obligation Bond debt capacity is 
limited to 3 percent of the City's net assessed property 
value. According to Ms. Ribble, the City's total debt 
capacity is currently $2,812,149,774, or 3 percent of an 
estimated net assessed property value of $93,738,325,815 
for FY 2002-2003. If the Board of Supervisors authorizes 
the sale of the proposed Branch Library Facilities 
Improvement Bonds, Series 2002B in the amount of 
$23,135,000, and after the sale of the Zoo Facilities 
Bonds, Series 2002A in the amount of $6,210,000, the 
City will have $946,565,000 in General Obligation Bond 
debt outstanding ($917,220,000 plus $23,135,000 for the 
Branch Library Facilities Improvement Bonds, Series 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

6 



Memo to the Finance Committee 

August 14, 2002 Finance Committee Meeting 






2002B, plus $6,210,000 for Zoo Facilities Bonds, Series 
2002A). This will leave $1,865,584,774 in General 
Obligation Bond capacity remaining. 

5. Ms. Ribble advises that due to the Bond Accountability 
Ordinance, there must be a 60 day waiting period 
between introduction of a General Obligation Bond 
proposal and consideration by the full Board of 
Supervisors. Under that rule, the earliest date by which 
the full Board of Supervisors can consider sale of the 
proposed Branch Library Facilities Improvement Bonds, 
Series 2002B is August 26, 2002, according to Ms. Ribble. 

6. According to Mr. Nichols, the anticipated General 
Obligation Bond proceeds from the proposed bond sale in 
the amount of $23,135,000 have already been 
appropriated in the Public Library's FY 2002-2003 
budget. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



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Attachment III 



BRANCH LIBRARY IMPROVEMENTS 8/8/02 

BOND SALE SCHEDULE 



June 2001 


$ 17,665,000 


September 2002 


$ 23,135,000 


January - March 2004 


$ 20,100,000 


April - June 2005 


$ 21,500,000 


October - December 2006 


$ 17,500,000 


April - June 2008 


$ 5,965,000 


TOTAL 


$105,865,000 



10 



Attachment IV 



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Attachment V 



Estimated Cost of Issuance Breakdown 

Bond Counsel Fees 36,000.00 

Financial Advisor Fees 21 ,000.00 

City Staff 1 65,000.00 

POS/OS Printing 15,000.00 

Rating Fees 1 44,750.00 

Advertising (Bond Buyer and other) 2,500.00 

Contingency 25,750.00 

210,000.00 

1 Moody's, S&P and Fitch 



12 



Memo to Finance Committee 

August 14, 2002 Finance Committee Meeting 



Item 2 - File 02-1290 

Department: 

Item: 



Amount: 
Source of Funds: 



Description: 



Airport 

Resolution approving Modification No. 7, the Close-out 
Modification, to Professional Services Agreement, 
Contract 5700CM - Construction Management Services 
for the AirTrain System, with PGH Wong 
Engineering/Luster Construction Management, in the 
amount of $2,644,367, for a new total contract amount not 
to exceed $32,847,364. 

$2,644,367 (see Comment No. 7) 

Master Plan Capital Improvement Program 

- Airport Revenue Bonds Issue 16A/13B: $1,417,408 
Airport's contribution - BART Fixed Facilities 

- Airport Revenue Bonds Issue 16A: 76,959 
Airport's contribution - BART Systems 

- Airport Revenue Bonds Issue 16A: 1.150.000 
TOTAL: $2,644,367 

On May 16, 1995 the Airport Commission awarded a 
Professional Services Contract to a joint venture of PGH 
Wong Engineering and Luster Construction Management 1 
in the amount of $1,400,000, to provide construction 
management services for the AirTrain System to be 
constructed at the Airport 2 . According to Mr. Ivar Satero 
of the Airport, the contract was designed as a year-to-year 
contract, renewable on an annual basis, rather than as a 
multi-year contract, to permit the Airport to determine 
annually whether or not it was satisfied with the 



1 In addition to the two joint venture partners, PGH Wong Engineering, Inc. and Luster 
Construction Management, the original contract included four sub-consultants: CPM Services, EPC 
Consultants, Inc., AL Consulting, and O'Brien Kreitzberg Inc. Subsequently, the following sub- 
consultants were added to the contract: Lea + Elliot, Inc., National Constructor's Group, Transit 
Guideway Consultants, Battelle, Logplan LLC, MG Engineering, Fay & Associates, and Leigh Fisher 
Associates. 

2 The AirTrain system will be a fully automated transit system used to transport passengers and 
Airport personnel between the Airport's terminals, parking structures, rental car facilities, cargo 
facilities, and remote parking facilities. The system comprises (a) the computerized AirTrain 
Operating System and the Central Control Facility, (b) a 7,000 foot clockwise Inner Loop track, a 
7,000 foot counter-clockwise Outer Loop, and an approximately 1.5 mile dual lane track out to the 
remote parking facilities, (c) six stations, (d) 38 passenger vehicles and one maintenance recovery 
vehicle, and (e) five power distribution substations. 

Board of Supervisors 
Budget Analyst 

13 



Memo to Finance Committee 

August 14, 2002 Finance Committee Meeting 



contractor's performance. Subsequently, the Airport 
Commission approved six modifications to the subject 
contract to fund PGH Wong Engineering/Luster 
Construction Management to provide ongoing 
construction management services for both: 

(a) The AirTrain System and Related BART Fixed 
Facilities Project. BART fixed facilities related to 
construction of the AirTrain System include the 
combined structures supporting both the AirTrain 
and BART train-track beds. 

(b) Oversight of the Airport's share of the BART systems 
costs of the BART-SFO Extension construction 
project, which is a component of the current BART- 
managed project to extend the BART system from 
Colma to San Francisco Airport and Millbrae. 

As shown in Attachment I, provided by Mr. Satero, the 
current total value of the PGH Wong Engineering/Luster 
Construction Management contract is $32,847,367 
including the proposed Contract Modification No. 7 in the 
amount of $2,644,367. 

According to Mr. Satero, the proposed Contract 
Modification No. 7 would permit PGH Wong 
Engineering/Luster Construction Management to: 

(a) Provide construction management services during 
the construction completion, start-up testing, and 
close-out phases of the AirTrain System and Related 
BART Fixed Facilities Project. According to Mr. 
Satero, Contract Modification No. 7 was predicated 
on an anticipated opening of the AirTrain System in 
September of 2002. Due to an accident which 
occurred on August 4, 2002 during testing of the 
AirTrain System, the opening may be delayed by 
approximately two months, until October 31, 2002. 
A collision between two computer-controlled trains 
resulted in damage to both cars, train-track 
equipment, and the emergency walkway. Mr. Satero 
expects that the Airport will require additional PGH 
Wong Engineering/Luster Construction Management 
staff time to audit the records and test program of 

Board of Supervisors 
Budget Analyst 

14 



Memo to Finance Committee 

August 14, 2002 Finance Committee Meeting 



Budget: 



the AirTrain Operating System contractor, 
Bombardier (see Comment No. 3). 
(b) Oversight and final cost reconciliation of the 
Airport's portion of the BART systems costs of the 
BART-SFO Extension Project. These projects 
include installing the rail lines into the Airport, 
constructing the power distribution, train control, 
bulk power supply, and emergency smoke removal 
systems, and building the five power distribution 
substations. Mr. Satero forecasts that construction 
will be completed by January of 2003. 

Attachment I provides descriptions and budget details of 
the original contract and all contract modifications to 
date, including the proposed Contract Modification No. 7. 
A summary of the contract costs is as follows: 



Contract Modifications 


Amount 


Original contract 


$1,400,000 


Contract Modifications No. 1-6 


28,803,000 


Contract Modification No. 7 


2.644.367 


TOTAL: 


$32,847,367 



Comments: 



1. According to Mr. Satero, the original $1,400,000 
contract was awarded to PGH Wong Engineering/Luster 
Construction Management following a Request for 
Qualifications process. 

2. Under Charter Section 9.118(b), all contracts which 
are in excess of $10,000,000 or which have a term of ten 
years or more, except for construction contracts, are 
subject to Board of Supervisors approval. As shown in 
Attachment I, the contract with PGH Wong 
Engineering/Luster Construction Management totaled 
$10,023,000 with the authorization of Contract 
Modification No. 2, thereby exceeding the $10,000,000 
threshold by $23,000. Contract Modifications Nos. 3 
through 6 were not submitted to the Board of Supervisors 
for approval. On May 31, 2002, the City Attorney issued 

Board of Supervisors 
Budget Analyst 
15 



Memo to Finance Committee 

August 14, 2002 Finance Committee Meeting 



Opinion No. 2002-03 pertaining to the application of 
Charter Section 9.118(b) stating that: 

The City Attorney's Office has received questions in the 
past concerning the application of Charter section 9.11803) 
to construction-related professional services contracts. 
Although we have not previously issued formal advice on 
these questions and they have arisen infrequently, deputies 
have given varying advice to departments concerning this 
provision. 

In Opinion No. 2002-03, the City Attorney advises, with 
respect to contracts pertaining to architectural, 
engineering, and construction management services, that 
Board of Supervisors approval is now required for 
contract modifications, if the modification causes the 
cumulative amount of the contract to exceed $10 million, 
or causes the term of the contract to exceed 10 years. 

Therefore, according to Ms. Gretchen Nicholson of the 
City Attorney's Office, the City Attorney has concluded 
that the proposed subject Contract Modification No. 7 is 
subject to Board of Supervisors approval. 

3. Mr. Satero states that the Airport anticipates a 
Contract Modification No. 8 due to the accident which 
occurred on August 4, 2002 during testing of the 
computer-controlled AirTrain System. Mr. Satero expects 
that the Airport will require additional PGH Wong 
Engineering/Luster Construction Management staff time 
to audit the records and test program of the AirTrain 
Operating System contractor, Bombardier. At the time of 
writing this report, the Airport has neither estimated the 
number of additional staff hours required nor the total 
cost of the anticipated Contract Modification No. 8. 
Contract Modification No. 8 would be subject to Board of 
Supervisors approval. 

4. According to Mr. Satero, construction of the AirTrain 
System and Related BART Fixed Faculties Project is 
approximately 97 percent complete. However, at this 
time, Mr. Satero estimates that the AirTrain System 
should be operational as of October 31, 2002. Mr. Satero 
advises that before the August 4, 2002 accident the 

Board of Supervisors 

Budget Analyst 

16 



Memo to Finance Committee 

August 14, 2002 Finance Committee Meeting 



AirTrain System had already been approximately 8.5 
months behind schedule as a result of: 

• Late completion in December of 2000 of segments of 
the AirTrain train-track bed by the Tutor-Saliba 
Corporation, which delayed access for construction of 
the terminal stations by another contractor, DJ 
Amorosa. 

• The delayed terminal station construction, along with 
several required design changes at the stations, 
delayed development and testing of the computerized 
AirTrain Operating System provided by another 
contractor, Bombardier. 

Attachment II is a memo, provided by Mr. Satero, which 
contains additional information about the AirTrain 
System construction project delays which preceded the 
August 4, 2002 accident. 

5. According to Mr. Satero, construction by BART of the 
BART systems portion of the BART-SFO Extension 
Project was originally scheduled for completion in 
December of 2001. However, due to construction delays 
caused by the Joint Powers Board 3 restrictions and 
requirements for working within the Joint Powers Board 
right-of-way and the need to protect an endangered 
species of wetland snake, construction is now scheduled to 
be operational in January of 2003. 

6. According to Mr. Satero, the total cost to the Airport of 
the AirTrain System and Related BART Fixed Facilities 
Project is $425,417,522, and the Airport's total share of 
the BART systems portion of the BART-SFO Extension 
Project is $74,700,000 4 , for a total cost of $500,117,522. 
Therefore, the total $32,847,367 cost of the Airport's 



3 The Joint Powers Board is the managing authority responsible for the Caltrain rail system. The 
membership of the Joint Powers Board includes the City and County of San Francisco, the San 
Mateo County Transit District, and the Santa Clara Valley Transportation Authority. According to 
Mr. Satero, approximately 75 percent of the construction work related to the BART-SFO Extension 
Project took place within Caltrain's right-of-way which necessitated significant protection 
requirements for Caltrain during the excavation work. 

4 Mr. Satero advises that the Airport's share of the BART systems portion of the BART-SFO 
Extension Project was determined in conformance with Federal Aviation Administration eligibility 
guidelines. 

Board of Supervisors 
BudgetAnalyst 



Memo to Finance Committee 

August 14, 2002 Finance Committee Meeting 



contract with PGH Wong Engineering/Luster 
Construction Management to provide construction 
management services represents approximately 6.6 
percent of the Airport's total costs for the AirTrain and 
BART projects. According to Mr. Satero, while the 
Airport budgets 5 percent for construction management 
services, it adjusts this percentage to provide for project- 
specific requirements which vary based on a construction 
project's technical complexity, schedule, coordination 
requirements, involvement of other agencies, and other 
factors. Mr. Satero states that the cost of the PGH Wong 
Engineering/Luster Construction Management contract, 
at 6.6 percent of the Airport's total costs for the AirTrain 
and BART projects, is lower than anticipated given the 
AirTrain System's technical complexity, the degree of 
interface with adjacent projects, the construction delays to 
date, and the current testing which is ongoing 24 hours 
per day, seven days per week. For the Master Plan 
Expansion Project as a whole, the Airport has experienced 
a 6.9 percent construction management services cost, 
according to Mr. Satero. 

7. As previously noted, the proposed Contract 
Modification No. 7 would increase the total PGH Wong 
Engineering/Luster Construction Management cost by 
$2,644,367, from $30,203,000 to $32,847,367. The 
proposed resolution states that the total would be 
$32,847,364, or $3 less than the actual amount. The 
proposed resolution should be amended to total 
$32,847,367. 



Board of Supervisors 

Budget Analyst 

18 



Memo to Finance Committee 

August 14, 2002 Finance Committee Meeting 



Recommendations: 



1. Amend the proposed resolution to reflect the correct 
total construction management services contract amount 
of $32,847,367 instead of $32,847,364. 



2. Approve the proposed resolution, as amended. 




Harvey M. Rose 



cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 



Board of Supervisors 
Budget Analyst 

19 



Aug. 3. 2( 



SFIA BDC 650 321-7739 



Attachment I 



71 



Page 1 of 3 

San Francisco International Airport 



MEMORANDUM 



f.O.BoxS097 

San Francisco, CA 94123 

Tel 650. S2 1.5000 

Fax 650.621.5005 

www.flysfo.com 



COvimiSSlON 

CITY AND COUNTY 

of san rMNCtsco 

VYIli.lt L. SHOWji, JK 
«<rO» 

MENBV E 6ESMAN 




TO: Budget Analysts' Office 

FROM: Ivar Satero, Administrator 

Bureau of Design & Construe* 



DATE: August 8, 2002 

PROJECT: File 02-1290 

Modification to Airport Contract 5700.CM - Professional Services 
Agreement with PGH Wong Engineering/Luster Construction 
Management 

SUBJECT: Summary of Modifications and Funding 



LABnv MAZZOU 
WCC fRlilOMT 



MICMAfl S STnUNSK' 



LINDA i ChAYTCN 



john i.mahtin 

AWORT DlflCCTOrt 



As per your request, we are providing additional information regarding previous 
modifications to the Airports 5700. CM contract with the joint venture of PGH Wong 
Engineering/Luster Construction Management (Wong/Luster). This contract provides 
for construction management (CM) services for: SFO's AirTrain System and Related 
BART Fixed Facilities Project, which are the BART fixed facilities constructed 
integrally with the AirTrain System and include the combined structures supporting 
both the AirTrain and BART train-track beds; and, oversight of the Airport's share of 
the BART systems costs of the BART-SFO Extension construction project, which is a 
component of the current BART-managed project to extend the BART system from 
Colma to SFO and Millbrae. 

The services to be provided by the CM consultants in support of the Airport Master 
Plan Expansion Program are described generally in Appendix A of the Professional 
Services Agreement between the Airport and consultants. The Airport developed a 
Program Management Manual for implementation by the CM consultants as a 
minimum Airport requirement for administering and managing construction contracts. 
The scope of services to be provided by the consultants did not change at each annual 
modification. The annual modifications typically provided for additional funding, 
administrative contractual changes and extensions to duration. 

Exhibit A attached to this memo summarizes the modifications to the contract and 
provides a budget breakdown for the allocation of costs to AirTrain as part of the 



20 



AUg. '6. l\i\ii lUm MIA AM, bSU Ml-HW Attachment I No. /iaj r 1 . j/4 



Page 2 of 3 



Master Plan Expansion Program and the Airport's "up to S200 million" contribution 
to the BART-SFO Extension Project. The budget allocations between the Air Train 
and BART Fixed Facilities is based on a 93.61% Airport/6. 39% BART split. This 
split was determined and agreed upon by both parties during the development of the 
BART-SFO Extension Project - Project Development Agreement, dated April 8, 
1997. The budget for the BART Systems is allocable 100% to BART. 

Further, Exhibit A provides a comparison of the modification amounts to 
Wong/Lusters' annual Staffing Plan funding request, with manhours. Typically, the 
Airport requested from Wong/Luster a proposed "'ideal" staffing plan for the next year 
and a staffing plan through to project completion to assist in updating the forecast-at- 
completion. Wong/Luster was also given a target budget and was required to submit 
a staffing plan that correlated with the target budget. The Airport would then meet 
with the Principal of Wong/Luster and review the target budget staffing plan position 
by position to determine whether additional positions or manhours were required for 
each function. The negotiated agreed-upon staffing plan would typically increase the 
target budget but would be within the overall project budget. The modification 
amount would be further adjusted to account for any anticipated underrun or overrun 
from the previous year. 

If you have any questions regarding on this information, please don't hesitate to call. 



21 



From. SDC To. Alan Gi&son 



Dale: Wiuvut lime 




San Francisco Interrwuion.ii Wrp< 



Attachment II 
Page 1 of 2 



MEMORANDUM 




TO: Budget Analysts' Office 

FROM: Ivar Satero, Administrator 

Bureau of Design &. Co 

DATE: August 7, 2002 

PROJECT: File 02-1290 

Modification to Airport Contract 5 700. CM - Professional Services 
Agreement with PGH Wong Engineering/Luster Construction 
Management 

SUBJECT: AirTrain Constaiction Project Delays 



The SFO AirTrain project is currently scheduled to complete in September 2002. The 
original contract completion date for the 5703. A - AirTrain Operating System contract 
with Bombardier Transportation (formerly Adtranz) is December 1 5, 2001 . This is 
the final contract to complete for the opening of AirTrain. There have been a number 
of significant issues encountered throughout the 5 (five) plus years of construction of 
the various contracts required for the implementation of the AirTrain System which 
have contributed to this delay. 

One of the first construction contracts for AirTrain was the 5700.A - AirTrain 
Guideway, East Loop contract with Tutor-Saliba Corporation. This contract was 
scheduled to complete in February 2000. 11 was completed in December 2000. 
approximately 10 months behind schedule. These delays were unavoidable and 
resulted from a number of differing site condilions as well as construction restrictions 
due to Airport operations. The construction occurred around the domestic terminal 
loop, both within the existing Central Garage and in the roadways. Due to the age of 
the existing facilities, there were a significant number of utility conflicts and 
underground conditions not identified which contributed to the delay. It was not 
possible to mitigate the delays to this contract due to Airport operational requirements 
and site restrictions. 

The late completion of the 5700. A contract delayed access to the 5706.A - AirTrain 
Domestic Stations contract. This contract provides for the construction of the 



23 



BDC To Alan Gioson 



Date, ai/uuu^ lime, i i.a# *■» /-»v. 

Attachment II 
Page 2 of 2 



concourse level of the station, platform canopies, conveyances, windscreens, 
pedestrian bridges and garage connectors. The late access delay was not recoverable, 
due to the Airport compressing the construction schedule as a result of the anticipated 
late completion of the 5700. A contract, Airport operational requirements and site 
restrictions. 

Coordinated access was granted to the 5703. A contractor for the installation of the 
structural steel and barrier wall station doors (the glass doors that open and close with 
the train doors) as early as possible to minimize the impact resulting from the 
subsequent construction delays, while assuring a safe working environment. 
However, design changes to the structural steel supporting the barrier wall and station 
doors was required which further delayed the 5703. A contractor. This "Airport" 
delay was concurrent with the delays in the development and testing of Bombardier's 
"Flcxiblok" automated train control system, which ultimately drives out the AirTrain 
opening date to September 2002. 

Given the multitude of construction challenges encountered during the AirTrain 
construction project, the technical complexity of the various contracts and interfaces 
with existing Airport facilities and on-going related construction, PGH Wong 
Engineering/Luster Construction Management has served the Airport well. They have 
taken appropriate actions to minimize impacts to cost and schedule as a result of the 
numerous unforeseeable issues. They have accelerated work when appropriate, 
directed resequencing due to access delays, coordinated access and construction 
activities for the safe prosecution of the work under the various contracts. 

If you have any questions regarding this information, please don't hesitate to call. 



24 



55 

i/ox 




City and County of jSan Francisco 

JMeeting Agenda 

.Finance Committee 

Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 
Clerk: Gail Johnson 



City Hall 
1 Dr. Carlton B. Goodlett Place 
San Francisco. C A 94102-4689 



Wednesday, August 21, 2002 



12:30 PM 
Regular Meeting 



City Hall, Room 263 



Note: Each item on the Consent or Regular agenda may include the following documents: 

1) Legislation 

2) Budget Analyst report 

3) Legislative Analyst report 

4) Department or Agency cover letter and/or report 

5) Public correspondence 

These items will be available for review at City Hall, Room 244, Reception Desk. 



Each member of the public will be allotted the same maximum number of minutes to speak as set by 
the Chair at the beginning of each item, excluding City representatives, except that public speakers 
using translation assistance will be allowed to testify for twice the amount of the public testimony 
time limit. If simultaneous translation services are used, speakers will be governed by the public 
testimony time limit applied to speakers not requesting translation assistance. 



AGENDA CHANGES 



REGULAR AGENDA 



DOCUMENTS DEPT. 
AUG 1 6 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



021418 [Planning Commission - Alternative Approval Process] 
Supervisor Peskin 

Emergency ordinance amending the San Francisco Planning Code by amending Section 306, and 
amending the San Francisco Administrative Code by amending Sections 2A.53 and 31.04. to provide 
for an alternative process to Planning Commission approval where the Planning Commission is unable 
to meet because a majority of its members has not been appointed; adopting declaration of emergency 
under Charter Section 2.107; and setting forth period of time within which this emergency ordinance 
shall be operative. 

8/12/02. RECEIVED AND ASSIGNED to Transportation and Commerce Committee 
8/14/02. TRANSFERRED to Finance Committee. 



City and County of San Francisco 



Printed at 11:07 AM on 8/1S/02 



Finance Committee 



Meeting Agenda 



Wednesday, August 21, 2002 



021313 [Branch Library General Obligation Bond Sale] 
Mayor 

Resolution authorizing and directing the sale of not to exceed $23,135,000 City and County of San 
Francisco General Obligation Bonds (Branch Library Facilities Improvement Bonds, 2000), Series 
2002B; prescribing the form and terms of said bonds; authorizing the execution, authentication and 
registration of said bonds; providing for the appointment of depositories and other agents for said 
bonds; providing for the establishment of accounts related thereto; approving the forms of official 
notice of sale and notice of intention to sell bonds; directing the publication of the notice of intention 
to sell bonds; approving the form and execution of the official statement relating thereto; approving 
the form of the continuing disclosure certificate; approving modifications to documents; ratifying 
certain actions previously taken; and granting general authority to City officials to take necessary 
actions in connection with the authorization, issuance, sale and delivery of said bonds. (Mayor) 

7/31/02. RECEIVED AND ASSIGNED to Finance Committee. 
8/14/02. NO ACTION TAKEN. LACK OF QUORUM.. 



021445 [Study of Hetch Hetchy Restoration] 
Supervisors Peskin, Ammiano, Daly 

Resolution authorizing San Francisco to participate in a public and independent study of the feasibility 
of restoring the Hetch Hetchy Valley in Yosemite National Park while meeting the objectives of the 
Public Utility Commission's Capital Improvement Plan, including the needs to repair aging 
infrastructure, reduce exposure to natural threats, accommodate changing regulations and meet future 
demand. 

8/12/02. RECEIVED AND ASSIGNED to Finance Committee. Sponsors request this item be scheduled for consideration at 
the August 21, 2002. meeting. 



020794 [Ellis-O'Farrell Parking Garage Bond Refinancing] 
Mayor 

Resolution approving and authorizing the issuance of City of San Francisco Ellis-O'Farrell Parking 
Corporation Parking Revenue Refunding Bonds to refund in part bonds previously issued by the City 
of San Francisco Ellis-O'Farrell Parking Corporation; approving a bond indenture modifying the 
maximum amount of the contingent reserve fund; authorizing and ratifying the execution and delivery 
of documents reasonably necessary for the issuance, sale and delivery of such refunding bonds; and 
ratifying previous actions taken in connection therewith. (Mayor) 

(Fiscal impact.) 

5/13/02. RECEIVED AND ASSIGNED to Finance Committee 

6/5/02. CONTINUED TO CALL OF THE CHAIR. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Momque 

Mover. Mayor's Office of Public Finance. Ronald Szeto. Acting Director. Parking Authority. Mr. Pang; Anson Lee. Manager. 

Ellis-O'Farrell Parking Corporation 

7/31/02. CONTINUED TO CALL OF THE CHAIR. Speakers: None. 



021315 [Contracting out Janitorial Services] 

Resolution concurring with the Controller's Certification that janitorial services can be practically 
performed at the Asian Art Museum under private contract at a lesser cost than similar work 
performed by employees of the City and County. (Asian Arts Commission) 

7/29/02. RECEIVED AND ASSIGNED to Finance Committee 



Cay and County of San Francisco 



Printed at 11:08 AM on 8/15/02 



Finance Committee 



Meeting Agenda 



Wednesday, August 21, 2002 



021416 [Grant Federal Funds] 
Mayor 

Resolution authorizing the Municipal Transportation Agency Board to accept and expend 
$15,925,000 of Federal Formula Section 5307 Capital Assistance for San Francisco capital project 
Motor Coach Replacement, excluding Administrative Overhead Costs. (Mayor) 

8/12/02, RECEIVED AND ASSIGNED to Transportation and Commerce Committee. Sponsor requests this item be 
scheduled for consideration at the August 22. 2002 meeting. 
8/13/02. TRANSFERRED to Finance Committee. 



021423 [Lease of Real Property] 
Mayor 

Resolution authorizing a new lease of real property at2525-16th Street on behalf of the Department of 
Elections. (Mayor) 



(Public Benefit Recipient; District 6.) 

8/12/02. RECEIVED AND ASSIGNED to Finance Committee. 



021290 [Modification to the Professional Service Agreement for Construction Management Services for 
SFO AirTrain for a new total contract amount] 

Resolution approving Modification No. 7, the Close-out Modification, to Professional Services 
Agreement, Contract 5700CM - Construction Management Services for the AirTrain System, with 
PGH Wong Engineering/Luster Construction Management, in the amount of $2,644,367 for a new 
total contract amount not to exceed S32,847,364. (Airport Commission) 



(Fiscal impact; Public Benefit Recipient.) 

7/24/02, RECEIVED AND ASSIGNED to Finance Committee. 
8/14/02, NO ACTION TAKEN. LACK OF QUORUM.. 



021324 [Airport Concession Lease] 

Resolution approving the Domestic Terminals Automated Teller Machine Lease A between Wells 
Fargo Bank, N.A. and the City and County of San Francisco, acting by and through its Airport 
Commission. (Airport Commission) 

(Public Benefit Recipient.) 

8/7/02, RECEIVED AND ASSIGNED to Finance Committee. 






10. 021403 [Airport Information Booth Contract, Fiscal Year 2002-2003] 

Resolution approving the Controller's Certification that Airport Information Booth Services at San 
Francisco International Airport can practically be performed by private contractor at a lower cost than 
if work were performed by City employees at currently budgeted levels. (Airport Commission) 

(Public Benefit Recipient.) 

8/7/02, RECEIVED AND ASSIGNED to Finance Committee. 






City and County of San Francisco 



Printed at 11:08 AM on 8/15/02 



Finance Committee 



Meeting Agenda 



Wednesday, August 21, 2002 



11. 021410 [Accept and Expend Federal Grant] 

Resolution authorizing the Airport Commission to accept and expend a funding increase from 
$1,202,500 to $1,695,500 from the Federal Aviation Administration ("FAA") for the SFPD- 
AIRPORT Bureau K-9 Explosive Detection Team. (Airport Commission) 

(Public Benefit Recipient.) 

8/7/02. RECEIVED AND ASSIGNED to Finance Committee. 



12. 021404 [Setting San Francisco's fiscal year 2002-2003 property tax rate and establishing pass-through 

rate for residential tenants] 

Ordinance providing revenue and levying property taxes for City and County purposes and 
establishing passthrough rate for residential tenants pursuant to chapter 37 of the administrative code 
for the fiscal year ending June 30, 2003. (Controller) 

8/7/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at 
the August 21. 2002 meeting. 

13. 021405 [Setting San Francisco Community College District's fiscal year 2002-2003 property tax rate to 

be included in the City's overall property tax rate] 

Ordinance providing revenue and levying property taxes for San Francisco Community College 
District purposes for the fiscal year ending June 30, 2003. (Controller) 

8/7/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at 
the August 21. 2002 meeting. 



14. 021406 [Setting San Francisco's Unified School District's fiscal year 2002-2003 property tax rate to be 

included in the City's overall property tax rate] 

Ordinance providing revenue and levying property taxes for San Francisco Unified School District's 
purposes for the fiscal year ending June 30, 2003. (Controller) 

8/7/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at 
the August 21 . 2002 meeting. 



15. 021407 [Rescind funding for the Art Commission for municipal symphony concerts using property tax 

revenue] 

Ordinance rescinding $31,964 in appropriation authority for the municipal symphony concerts using 
property tax revenue, pursuant to Charter Section 16.106(1) for the Art Commission for fiscal year 
2002-03. (Controller) 

8/7/02. RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at 
the August 21 . 2002 meeting 



ADJOURNMENT 



City and County of San Francisco 



Printed at 11:08 AM on 8/15/02 



Finance Committee Meeting Agenda Wednesday, August 21, 2002 

IMPORTANT INFORMATION 

NOTE: Persons unable to attend the meeting may submit to the City, by the time the proceeding 
begins, written comments regarding the agenda items above. These comments will be made a part of 
the official public record and shall be brought to the attention of the Board of Supervisors. Any 
written comments should be sent to Committee Clerk, Finance Committee, San Francisco Board of 
Supervisors, J Dr. Carlton B. Goodlett Place, Room 244, San Francisco, California 94102 by 5:00 
p.m. on the day prior to the hearing. Comments which cannot be delivered to the committee clerk by 
that time may be taken directly to the hearing at the location above. 



LEGISLATION UNDER THE 30-DAY RULE 



(Not to be considered at this meeting) 

Rule 5.42 provides that when an ordinance or resolution is introduced which would CREATE OR 
REVISE MAJOR CITY POLICY, the committee to which the legislation is assigned shall not consider 
the legislation until at least thirty days after the date of introduction. The provisions of this rule shall 
not apply to the routine operations of the departments of the City or when a legal time limit controls 
the hearing timing. In general, the rule shall not apply to hearings to consider subject matter when 
no legislation has been presented, nor shall the rule apply to resolutions which simply URGE action 
to be taken. 



021339 [Financial Information Privacy] 
Supervisor Peskin 

Ordinance amending the San Francisco Business and Tax Regulations Code to enact a new Article 20 
to provide for the protection of private financial information. 

7/29/02. ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 8/28/2002. 



City and County of San Francisco 5 Printed at 11.08 AM on 8/15/02 



Finance Committee Meeting Agenda Wednesday, August 21, 2002 

Meeting Procedures 

The Board of Supervisors is the Legislative Body of the City and County of San Francisco. The Board has 

several standing Committees where ordinances and resolutions are the subject of hearings at which members of 

the public are urged to testify. The full Board does not hold a second public hearing on measures which have 

been heard in committee. 

Board procedures do not permit: 1) persons in the audience at a Committee meeting to vocally express support 

or opposition to statements by Supervisors or by other persons testifying; 2) ringing and use of cell phones, 

pagers, and similar sound-producing electronic devices; 3) signs to be brought into the meeting or displayed in 

the room; 4) standing in the meeting room. 

Citizens are encouraged to testify at Committee meetings and to write letters to the Clerk of a Committee or to 

its members. City Hall, 1 Dr. Carlton B. Goodlett Place, Room 244, San Francisco, CA 94102. 

Agenda are available on the internet at www.ci.sf.ca.us/bdsupvrs.bos.htm. 

THE AGENDA PACKET IS AVAILABLE FOR REVIEW AT CITY HALL, ROOM 244, RECEPTION DESK. 

Board meetings are televised on channel 26. For video tape copies and scheduling call (415) 557-4293. 

Requests for language translation at a meeting must be received no later than noon the Friday before the 

meeting. Contact Ohn Myint at (415) 554-7704. 

AVISO EN ESPANOL: La solicitud para un traductor en una reunion debe recibirse antes de mediodia de el 

viemes anterior a la reunion. Llame a Erasmo Vazquez (415) 554-4909. 

mm i&m&&mmm&®-tA&&M!tim$ 

jjjflg (415) 554-7701 



Disability Access 

Both the Committee Room (Room 263) and the Legislative Chamber are wheelchair accessible. The closest 

accessible BART Station is Civic Center, three blocks from City Hall. Accessible MUNI lines serving this 

location are: #47 Van Ness, and the #71 Haight/Noriega and the F Line to Market and Van Ness and the Metro 

stations at Van Ness and Market and at Civic Center. For more information about MUNI accessible services, 

call 923-6142. 

There is accessible parking in the vicinity of City Hall at Civic Center Plaza and adjacent to Davies Hall and the 

War Memorial Complex. 

The following services are available when requested by 4:00 p.m. of the Friday before the Board meeting: 

For American Sign Language interpreters, use of a reader during a meeting, or sound enhancement system, 
contact Ohn Myint at (415) 554-7704. 

For a large print copy of agenda or minutes in alternative formats, contact Annette Lonich at (415) 554-7706. 
The Clerk of the Board's Office TTY number for speech-hearing impaired is (415) 554-5227. 
In order to accommodate persons with severe allergies, environmental illness, multiple chemical sensitivity or 
related disabilities, attendees at public meetings are reminded that other attendees may be sensitive to various 
chemical based products. 



Cay and County of San Francisco 6 Printed at 11:08 AM on 8/15/02 



Finance Committee Meeting Agenda Wednesday, August 21, 2002 

Know Your Rights Under the Sunshine Ordinance 

Government's duty is to serve the public, reaching its decisions in full view of the public. Commissions, boards, 
councils and other agencies of the City and County exist to conduct the people's business. The Sunshine 
Ordinance assures that deliberations are conducted before the people and that City operations are open to the 
people's review. For information on your rights under the Sunshine Ordinance (Chapter 67 of the San Francisco 
Administrative Code) or to report a violation of the ordinance, contact Donna Hall; by mail to Sunshine 
Ordinance Task Force, 1 Dr. Carlton B. Goodlett Place, Room 409, by phone at (415) 554-7724, by fax at (415) 
554-7854 or by email at Donna.Hall@sfgov.org 

Citizens may obtain a free copy of the Sunshine Ordinance by contacting Ms. Hall or by printing Chapter 67 of 
the San Francisco Administrative Code on the Internet, at http://www.sfgov.org/bdsupvrs/sunshine.htm 

Lobbyist Registration and Reporting Requirements 

Individuals and entities that influence or attempt to influence local legislative or administrative action may be 
required by the San Francisco Lobbyist Ordinance [SF Campaign & Governmental Conduct Code Sec. 2.100] to 
register and report lobbying activity. For more information about the Lobbyist Ordinance, please contact the 
San Francisco Ethics Commission at 30 Van Ness Avenue, Suite 3900, San Francisco, CA 94102; telephone 
(415) 581-2300; fax (415) 581-2317; web site www.sfgov.org/ethics 



City and County of San Francisco 7 Printed at 11:08 AM on 8/15/02 



FINANCE COMMITTEE 

S.F. BOARD OF SUPERVISORS 

CITY HALL. ROOM 244 

1 DR CARLTON GOODLETT PLACE 

SAN FRANCISCO. CA 94102-4689 

IMPORTANT HEARING NOTICE!!! 



F 

?0.25 

7 



CITY AND COUNTY 




[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



OF SAN FRANCISCO 



30ARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



August 15, 2002 



TO: finance Committee 

FROM: .^Budget Analyst 

SUBJECT: August 21, 2002 Finance Committee Meeting 

Item 2 - File 02-1313 



DOCUMENTS DEPT. 
AUG 2 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



Department: 



Item: 



Public Library 

Mayor's Office of Public Finance 

Resolution authorizing and directing the sale of not to 
exceed $23,135,000 City and County of San Francisco 
General Obligation Bonds (Branch Library Facilities 
Improvement Bonds, 2000), Series 2002B; prescribing the 
form and terms of said bonds; authorizing the execution, 
authentication and registration of said bonds; providing 
for the appointment of depositories and other agents for 
said bonds; providing for the establishment of accounts 
related thereto; approving the forms of official notice of 
sale and notice of intention to sell bonds; directing the 
publication of the notice of intention to sell bonds; 
approving the form and execution of the official statement 
relating thereto; approving the form of the continuing 
disclosure certificate; approving modifications to 

documents; ratifying certain actions previously taken; 
and granting general authority to City officials to take 
necessary actions in connection with the authorization, 
issuance, sale and delivery of said bonds. 



Amount: 



Not to exceed $23,135,000 



Memo to the Finance Committee 

August 21, 2002 Finance Committee Meeting 



Description: On November 7, 2000, San Francisco voters approved 

Proposition A, Branch Library Facilities Improvement 
Bonds, which authorized the City to issue up to 
$105,865,000 in General Obligation Bonds to: 

• Rehabilitate, renovate, and improve 19 of the 24 
existing branch libraries. This work includes seismic 
upgrades, improved disability access, mitigation of 
hazardous materials, modernizing and upgrading 
building systems, reconfiguration and expansion of 
interior spaces, and other improvements. 

• Acquire land and construct four new branch libraries 
currently housed in leased facilities in the Glen Park, 
Ingleside, Portola, and Visitacion Valley 
neighborhoods. 

• Construct one new branch library in the Mission Bay 
neighborhood. 

• Construct a new system-wide administrative support 
services center. 

Attachment I, provided by the Public Library, contains a 
list of all the projects to be funded by the Branch Library 
Facilities Improvement Bonds and their estimated costs. 
Total estimated project costs are $118,515,000. According 
to Mr. George Nichols of the Public Library, these total 
estimated project costs will be funded by: 

• Branch Library Facilities Improvement Bonds 
($105,865,000). 

• Earthquake Safety Program II funds ($2,400,000). 

• State Proposition 14 funds ($10,250,000).! 

Mr. Nichols advises that construction and improvements 
of the branch libraries are scheduled for completion by the 
spring of 2010. All projects are on schedule at this time, 
according to Mr. Nichols. 



1 State Proposition 14, approved by the voters in March of 2000, provides $350,000,000 of State 
funds for library construction projects, which is awarded to libraries statewide on a competitive 
basis, and which requires a 35 percent local match. In January of 2002, the Public Library 
established a program reserve to cover the possibility that the State Proposition 14 funding allocated 
to San Francisco in the amount of $10,250,000 is not fully granted. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to the Finance Committee 

August 21, 2002 Finance Committee Meeting 



Attachment II, provided by the Public Library, contains 
the following information on each of the branch library 
facilities improvement projects: 

• Actual expenditures to date. 

• Anticipated additional expenditures. 

• Actual or estimated start date. 

• Estimated completion date. 

Although the sale of Branch Library Facilities 
Improvement Bonds, Series 2001E in the amount of 
$17,665,000 was authorized by the Board of Supervisors 
in May of 2001, only $866,899 have been expended or 
encumbered, as noted in Attachment II. This is because 
the Branch Library Facilities Improvement Program 
start-up was delayed while the Public Library went 
through the process of hiring a program manager, 
according to Mr. Nichols. In terms of the sites for the 
new branch libraries and the System-wide 
Administrative Support Services Center, and the 
preliminary project designs, Mr. Nichols states that the 
initial project schedule was optimistic in terms of the 
amount of time it would take to survey available sites, 
develop the preliminary designs, obtain community input 
about the sites and preliminary designs, and obtain 
authorization to acquire the sites. Most of that work has 
now been completed and the Public Library is ready to 
move forward with the design review and approval and 
site acquisition stages of the projects, according to Mr. 
Nichols. 

Attachment III, provided by the Public Library, is a 
schedule of the anticipated dates when the remaining 
bonds of $65,065,000 will be sold ($105,865,000 less 
$17,665,000 for Branch Library Facilities Improvement 
Bonds, Series 200 IE, and the proposed sale of 
$23,135,000 for Branch Library Facilities Improvement 
Bonds, Series 2002B). 

On May 14, 2001, the Board of Supervisors approved the 
general terms and procedures for the issuance of the 
$105,865,000 in Branch Library Facilities Improvement 
Bonds. The Board of Supervisors approved the following 
general provisions regarding issuance of these bonds: 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

3 



Memo to the Finance Committee 

August 21, 2002 Finance Committee Meeting 



• The bonds shall be divided into various series, as 
authorized by the Board of Supervisors. 

• Property Taxes collected to pay debt service on the 
bonds would be deposited in a special account, which 
would be created specifically for this purpose. 

• The proceeds of the sale of the bonds would be 
deposited into a Project Account, maintained by the 
City Treasurer, and would be applied exclusively to 
the projects approved under the subject bond. 

• The City Treasurer may appoint fiscal agents or 
financial institutions to distribute bond interest and 
principal payments. 

• The Board of Supervisors may, by resolution, 
authorize and direct the sale of any series of bonds to 
provide for the defeasance of such series bonds. 
Defeasance refers to either the full repayment of the 
bonds or the advance refunding of bonds by placement 
of sufficient funds in an escrow account and purchase 
of high quality investments such that the resulting 
cashflow is sufficient to meet future debt service 
requirements. 

On May 14, 2001, the Board of Supervisors authorized the 
sale of the initial series of Branch Library Facilities 
Improvement Bonds, Series 2001E, in a principal amount 
not to exceed $17,665,000. These bonds were issued on 
July 12, 2001, at a 4.68 percent interest rate for a 20 year 
term, with a June 15, 2021 maturity date. 

The Public Library is now seeking Board of Supervisors 
approval to sell a second series of Branch Library 
Facilities Improvement Bonds. Branch Library Facilities 
Improvement Bonds, Series 2002B would be issued in an 
amount not to exceed $23,135,000. 

Budget: The Public Library proposes to expend the estimated 

$23,135,000 in proceeds from the Branch Library 
Facilities Improvement Bonds, Series 2002B as shown in 
the table on the following page: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to the Finance Committee 

August 21, 2002 Finance Committee Meeting 



Amount 


Architectural, engineering, and 


$3,937,418 


design services 




Construction 


952,500 


Site acquisition 


16,243,550 


Program management 


818,532 


Relocation and moving 


1,080,000 


Costs of issuance 


103.000 


TOTAL: 


$23,135,000 



Comments: 



Attachment IV, provided by the Public Library, contains 
the expenditure categories of the branch library facilities 
improvement projects and budget details to support the 
above summary budget for the subject bond proceeds of 
$23,135,000. Mr. Nichols advises that the budget 
information is based on preliminary estimates. 

1. According to Ms. Karen Ribble of the Mayor's Office of 
Public Finance, the sale of the General Obligation Bonds 
is tentatively scheduled for September 18, 2002. The 
bonds will have a term of approximately 20 years, with an 
anticipated final maturity date of June 15, 2022. The 
bonds would be awarded to the bidder whose bid 
represents the lowest true interest cost to the City. Based 
on current market estimates as of July 31, 2002, the 
overall effective interest rate on the proposed Branch 
Library Faculties Improvement Bonds, Series 2002B 
would be approximately 4.825 percent, according to Ms. 
Ribble. Under those circumstances, it is estimated that 
the proposed sale of bonds in the amount of $23,135,000 
would result in a total debt service over the 20 year life of 
the bonds of approximately $36,058,000, including the 
principal amount of $23,135,000 and interest payments of 
$12,923,000. The estimated average annual debt service 
over the estimated 20 year life of the bonds is 
approximately $1,802,000. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to the Finance Committee 

August 21, 2002 Finance Committee Meeting 



2. According to the Controller's Office, the proposed 
Series 2002B sale of General Obligation Bonds in the 
amount of $23,135,000 would result in an increase in the 
Property Tax rate of approximately $0.00191 per $100 of 
assessed value. At that rate, the owner-occupier of a 
single-family residence assessed at $400,000 (net of the 
$7,000 homeowner's exemption) would pay approximately 
$7.64 in additional Property Taxes annually due to the 
issuance of these bonds. 

3. On June 3, 2002, the Board of Supervisors approved 
the sale of up to $6,210,000 in Zoo Facilities Bonds, Series 
2002A. Ms. Ribble advises that the Mayor's Office of 
Public Finance has decided to sell these Zoo Facilities 
Bonds at the same time as the proposed Branch Library 
Facilities Improvement Bonds, Series 2002B in order to 
reduce the City's bond issuance costs. Ms. Ribble advises 
that approximately $210,000 will be saved in bond 
issuance costs by selling both bond issuances 
simultaneously. Attachment V, provided by the Mayor's 
Office of Public Finance, details the bond issuance costs in 
the estimated amount of $210,000, or approximately 0.72 
percent of the total value of the bond sales in the amount 
of $29,345,000 ($23,135,000 for the Branch Library 
Facilities Improvement Bonds, Series 2002B, plus 
$6,210,000 for the Zoo Facilities Bonds, Series 2002A). 
Ms. Ribble reports that the bond issuance costs are to be 
paid from the bond proceeds. 

4. Ms. Ribble reports that, as of June 30, 2002, the City 
had $917,220,000 in outstanding General Obligation Bond 
debt. The City's General Obligation Bond debt capacity is 
limited to 3 percent of the City's net assessed property 
value. According to Ms. Ribble, the City's total debt 
capacity is currently $2,812,149,774, or 3 percent of an 
estimated net assessed property value of $93,738,325,815 
for FY 2002-2003. If the Board of Supervisors authorizes 
the sale of the proposed Branch Library Facilities 
Improvement Bonds, Series 2002B in the amount of 
$23,135,000, and after the sale of the Zoo Facilities 
Bonds, Series 2002A in the amount of $6,210,000, the 
City will have $946,565,000 in General Obligation Bond 
debt outstanding ($917,220,000 plus $23,135,000 for the 
Branch Library Facilities Improvement Bonds, Series 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to the Finance Committee 

August 21, 2002 Finance Committee Meeting 



2002B, plus $6,210,000 for Zoo Facilities Bonds, Series 
2002A). This will leave $1,865,584,774 in General 
Obligation Bond capacity remaining. 

5. Ms. Ribble advises that due to the Bond Accountability 
Ordinance, there must be a 60 day waiting period 
between introduction of a General Obligation Bond 
proposal and consideration by the full Board of 
Supervisors. Under that rule, the earliest date by which 
the full Board of Supervisors can consider sale of the 
proposed Branch Library Facilities Improvement Bonds, 
Series 2002B is August 26, 2002, according to Ms. Ribble. 

6. According to Mr. Nichols, the anticipated General 
Obhgation Bond proceeds from the proposed bond sale in 
the amount of $23,135,000 have already been 
appropriated in the Public Library's FY 2002-2003 
budget. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



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Attachment III 



BRANCH LIBRARY IMPROVEMENTS 8/8/02 

BOND SALE SCHEDULE 



June 2001 $ 17,665,000 

September 2002 $ 23,135,000 

January - March 2004 $ 20,100,000 

April - June 2005 $ 21,500,000 

October - December 2006 $ 17,500,000 

April - June 2008 $ 5,965,000 

TOTAL $105,865,000 



10 



Attachment IV 









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(HUG-0£-2a32 17=12 OFFICE OF PUBLIC FINANCE 



Attachment V 



Estimated Cost of Issuance Breakdown 

Bond Counsel Fees 36,000.00 

Financial Advisor Fees 21 ,000.00 

City Staff 1 65,000.00 

POS/OS Printing 15,000.00 

Rating Fees 1 44,750.00 

Advertising (Bond Buyer and other) 2,500.00 

Contingency 25,750.00 

210,000.00 

1 Moody's, S&P and Fitch 



12 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

Item 4 -File 02-0794 

Note: This item was continued by the Finance Committee at its meeting of July 31, 
2002. 



Department: 
Item: 



Amount: 
Source of Funds: 

Description: 



Parking Authority 

Mayor's Office of Public Finance 

Resolution (1) approving the issuance of Parking Revenue 
Refunding Bonds by the San Francisco Ellis-O'Farrell 
Parking Corporation in an amount not to exceed 
$6,500,000, to refinance bonds issued in 1992 which 
funded the seismic upgrade and expansion of the Ellis- 
O'Farrell Public Parking Garage; (2) approving a bond 
indenture modifying the maximum amount of the 
Contingent Reserve Fund by 50 percent from $500,000 to 
$750,000; (3) authorizing and ratifying the execution and 
delivery of documents reasonably necessary for the 
issuance, sale and delivery of such refunding bonds; and 
(4) ratifying previous actions taken in connection 
therewith. 

Not to exceed $6,500,000 

San Francisco Ellis-O'Farrell Parking Corporation 
Parking Revenue Refunding Bonds 

According to Mr. Ron Szeto of the Department of Parking 
and Traffic (DPT), the City-owned Ellis-O'Farrell Public 
Parking Garage, located at 123 O'Farrell Street, is leased 
by the City to the San Francisco Ellis-O'Farrell Parking 
Corporation, a nonprofit corporation. Attachment I, 
provided by DPT, contains background information on the 
San Francisco Ellis-O'Farrell Parking Corporation and 
their existing lease agreement with the City. Mr. Szeto 
advises that, under the terms of the approximately 26- 
year lease between the City and the Corporation which 
began on June 1, 1991 and terminates on April 1, 2017 1 , 
the Corporation is required to obtain Board of Supervisors 
approval for the issuance of tax-exempt bonds and the 
execution of various documents related to such bonds. In 
1992, the Board of Supervisors authorized the 
Corporation to issue $6,500,000 in Parking Revenue 
Bonds to seismically upgrade the Ellis-O'Farrell Garage 



1 According to the terms of the lease between the City and the Corporation, the lease period began on 
June 1, 1991 and terminates on the earlier of 50 years (May 31, 2041) or the date of the last debt 
service payment (April 1, 2017). 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

13 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

and expand the Garage by adding approximately 350 
parking spaces on two and one-half additional parking 
levels. According to Ms. Nadia Sesay of the Mayor's 
Office of Public Finance, the outstanding principal 
amount of debt from the original 1992 $6,500,000 bond 
issuance is $5,225,000 as of May 20, 2002. 

Approval of the proposed resolution would authorize the 
San Francisco Ellis-O'Farrell Parking Corporation to 
issue tax-exempt Parking Revenue Refunding Bonds in an 
amount not to exceed $6,500,000, in order to refund the 
outstanding 1992 Parking Revenue Bonds. According to 
Mr. Szeto, these Parking Revenue Refunding Bonds 
would be repaid from the gross receipts of the Ellis- 
O'Farrell Garage. According to Mr. Szeto, these Parking 
Revenue Refunding Bonds, as with the original 1992 
Parking Revenue Bonds, do not require the City's General 
Fund to repay the bonds. 

According to Ms. Sesay, the existing 1992 Parking 
Revenue Bonds have interest rates of between 6.9 percent 
and 7.125 percent and were issued with a 25-year term, 
with a final payment date on April 1, 2017. The 1992 
Parking Revenue Bonds can be called from investors on or 
after April 1, 2002. According to Ms. Sesay, the estimated 
true interest cost for the subject proposed Parking 
Revenue Refunding Bonds is 4.89 percent and the bonds 
would have an approximately 15-year term with the final 
payment still due on April 1, 2017. Attachment II, 
provided by the Mayor's Office of Public Finance, is a debt 
service comparison between the 1992 Parking Revenue 
Bonds and the proposed Parking Revenue Refunding 
Bonds, and an explanation of the one-time versus the 15- 
year aspects of the savings. 

As shown in Attachment II, the proposed refinancing of 
the 1992 Parking Revenue Bonds will result in an 
estimated total savings in aggregate debt service of 
$430,043.61, of which $428,000 would be realized on the 
anticipated issue date of September 10, 2002 as a one- 
time upfront savings plus $2,043.61 in net present value 
savings over the 15-year term of the bonds. This 
estimated savings is based on a par amount of $5,225,000 
(the outstanding principal amount of debt on the original 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

14 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



1992 bonds) at an average annual interest rate of 4.89 
percent for a term of 15 years, according to Ms. Sesay. 

According to the terms of the existing indenture between 
the Corporation and the Bank of America National Trust 
and Savings Association for the 1992 Parking Revenue 
Bonds, the Corporation retains 15 percent up to $500,000 
maximum of net annual revenues 2 from the operation of 
the Ellis-O'Farrell Garage in a Contingent Reserve Fund 
to be used only for Garage capital improvements. The 
proposed resolution would approve an indenture between 
the Corporation and the Trustee of the proposed 
Refunding Bonds, to be selected in August of 2002 
through a competitive bid process, to increase the 
maximum amount net revenues that the Corporation 
retains in the Contingent Reserve Fund by 50 percent 
from $500,000 to $750,000. According to the terms of the 
proposed indenture, whenever any funds are withdrawn 
for capital improvements from the Contingent Reserve 
Fund, the amount withdrawn would be replaced from 
subsequent net revenues up to $750,000. However, the 
Contingent Reserve Fund could not be allocated an 
amount in excess of 15 percent of the Garage's net 
revenues in any one year. According to Mr. Szeto, 
increasing the maximum amount of the Contingent 
Reserve Fund by 50 percent is necessary to allow the 
Corporation to set aside sufficient funds to address 
needed capital improvements including office renovations, 
the purchase of digital cameras for the vehicle entry lanes 
and stairwells, and other necessary improvements. 

Attachment III, provided by DPT, shows the actual and 
projected sources and uses of Ellis-O'Farrell Garage 
revenues from 1999 to 2017 (year ending April 30 th ). As 
shown in Attachment III, in 2003 the Corporation would 
retain in the Contingent Reserve Fund the estimated one- 
time savings of $428,000 from issuance of the proposed 
Parking Revenue Refunding Bonds, resulting in a 
Contingent Reserve Fund total of $467,925 in 2003 (year 
ending April 30 th ). According to the projections contained 
in Attachment III, at no time during the 15-year term of 



2 Net revenues are equal to gross receipts less Parking Taxes, operating expenses and annual debt 
service. 

BOARD OF SUPERVISORS 
BUDGE^ ANALYST 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

the proposed Parking Revenue Refunding Bonds does the 
Contingent Reserve Fund total more than $467,925. 
Therefore, the Budget Analyst questions the need to 
increase the maximum amount of net revenues that the 
Corporation retains in the Contingent Reserve Fund by 
50 percent, from $500,000 to $750,000, as is proposed in 
the new indenture for the subject Parking Revenue 
Refunding Bonds. Mr. Szeto responds in Attachment IV to 
the Budget Analyst's point by stating "There is always the 
possibility that the planned capital work for 2003 and 
subsequent years may not start or be completed exactly as 
scheduled within the Corporation's fiscal year. For this 
reason and the real possibility that the economy and the 
garage revenues will recover in the near future, the 
proposed Contingent Reserve Fund maximum limit of 
$750,000 will insure the availability of needed capital 
improvement funds without imposing a use or lose 
situation that does not have a negative financial impact to 
the City." 

According to Mr. Szeto, the Parking and Traffic 
Commission must approve capital improvement 
expenditures from the Contingent Reserve Fund, which 
are incurred by the San Francisco Ellis-O'Farrell Parking 
Corporation. Mr. Szeto reports that such expenditures are 
not subject to Board of Supervisors approval. 

Comments: 1. According to Ms. Sesay, the principal that would be 

outstanding on the prior 1992 Parking Revenue Bonds 
will be $5,225,000 on the date that the 1992 Parking 
Revenue Bonds are called, which is anticipated to be on 
October 14, 2002. The prior 1992 Parking Revenue Bonds 
have a Debt Service Reserve Fund which has a current 
balance of approximately $585,693. Those monies from 
the Debt Service Reserve Fund would be released when 
the 1992 Parking Revenue Bonds are defeased. 3 According 
to Ms. Sesay, approximately $565,940 of the $585,693 
Debt Service Reserve Fund would be used to fund a new 
Debt Service Reserve Fund 4 for the proposed refunding 



3 Defeasance is the term used to describe the termination of ail rights and interests of the 
bondholders upon final payment of all debt service, in the manner required by the terms and 
conditions of the bond resolution. 

4 Under the terms of the proposed refunding bond issuance and in accordance with Internal Revenue 
Service (IRS) Tax Regulations, the Corporation is required to fund a Debt Service Reserve Fund in 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



bonds. According to Ms. Sesay, the balance of $19,753 
($585,693 less $565,940) would be allocated to an Escrow- 
Fund for use in paying off the 1992 Parking Revenue 
Bonds. Ms. Sesay advises that a Debt Service Reserve 
Fund is required to provide for debt service payments in 
case of a funding shortfall. If a shortfall occurs, and the 
Trustee is required to pay debt service from this Reserve 
Fund, then the Reserve Fund would be replenished by 
Garage revenues. 

2. According to Ms. Sesay, the proceeds deposited in the 
Escrow Fund from the anticipated September 10, 2002 
sale of the subject Parking Revenue Refunding Bonds will 
be held by a third party trustee (the "Escrow Agent") to be 
selected through a competitive bid process in August of 
2002. On the anticipated bond call date of October 14, 
2002, the Escrow Agent will redeem the 1992 Parking 
Revenue Bonds with the monies held in the Escrow Fund. 

3. According to Ms. Sesay, the cost of issuance is 
estimated to be $250,000 for the proposed refunding 
bonds. Ms. Sesay reports that the cost of issuance is to be 
paid with bond proceeds. 

4. Ms. Sesay anticipates that the proceeds from the sale 
of the subject Refunding Bonds will be invested in State 
and Local Government securities until October 14, 2002, 
the anticipated call date for the 1992 Parking Revenue 
Bonds. 

5. Ms. Sesay notes that the exact amount of the proposed 
Parking Revenue Refunding Bond issuance in an amount 
not to exceed $6,500,000, will not be known until the date 
of the sale of the Parking Revenue Refunding Bonds, as 
the interest rate will affect the aggregate principal 
amount needed to fund the refunding escrow account and 
the bond insurance. However, Ms. Sesay advises that it is 
standard industry practice that issuance of refunding 
bonds must result in a debt service savings of at least 



the amount equal to the lesser of 10 percent of the par amount of the proposed Refunding Bonds, 100 
percent maximum annual debt service or 125 percent average annual debt service on the proposed 
Refunding Bonds. In this case, the amount of the Debt Service Reserve Fund is an amount equal to 
100 percent maximum annual debt service on the proposed Refunding Bonds or approximately 
$565,940. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

17 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

three percent of the bonds to be refunded, which in this 
case, for the original 1992 bonds, is $5,225,000. Therefore, 
in order to assure debt service savings of at least three 
percent, the Budget Analyst recommends that the 
proposed resolution be amended by adding the following 
provision: 

"further provided, that the par amount of the 
refunding bonds issued shall not exceed an 
amount that will produce a net present value 
debt service savings of at least three percent 
of the refunded amount of $5,225,000 to 
defease the Series 1992 Bonds, or $156,750 
as certified by the Corporation's independent 
financial advisor as a pre-condition to the 
Corporation's delivery of the Parking 
Revenue Refunding Bonds to the Trustee." 

Ms. Sesay concurs with the Budget Analyst's 
recommendation. 

6. According to Ms. Theresa Alvarez of the City 
Attorney's Office's, although the proposed resolution 
includes a provision to ratify previous actions taken in 
connection with the issuance of the proposed Parking 
Revenue Refunding Bonds, Ms. Alvarez is not aware of 
any such actions that have been taken. 

7. At its meeting of June 5, 2002, the Finance Committee 
requested DPT to evaluate the potential for having the 
City defease the existing bonds and dissolve the San 
Francisco Ellis-O'Farrell Parking Corporation. 
Attachment V, provided by Mr. Szeto, is a memorandum 
in response to the Committee's request. Attachment VI is 
a memorandum from Mr. Michael Martin of the City 
Attorney's Office's commenting on this matter. 

Recommendations: 1. In accordance with Comment No. 5 above, amend the 
proposed resolution to require that the par amount of the 
Parking Revenue Refunding Bonds to be issued by the 
San Francisco Ellis-O'Farrell Parking Corporation shall 
not exceed an amount that will produce a net present 
value debt service savings of less than three percent of the 
$5,225,000 which is the outstanding balance of the 1992 
bonds to be refunded. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

18 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



2. As noted in the Description Section above, the Budget 
Analyst questions the need to increase the maximum 
amount of net revenues that the Corporation retains in 
the Contingent Reserve Fund by 50 percent, from 
$500,000 to $750,000, as is proposed in the new indenture 
for the subject Parking Revenue Refunding Bonds, 
because at no time during the 15-year term of the 
proposed Parking Revenue Refunding Bonds does the 
Contingent Reserve Fund total more than $467,925 
according to the projections contained in Attachment III. 

3. Approval of the proposed resolution, as amended, is a 
policy decision for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

19 



F?CM : PARKING WJTHCF.ITY 



SAN F H A M C 1 3 C O 



PHONE NO. 



Attachment I 
Page 1 of 3 
City and County of San Francisco 




3EPARTMEWT OF PARKiKC A TRAFFIC 




WILLIE LEWIS BROWN, JR., Mayor 

=S=3 M. HAMDUN, EXECUTIVE DIRECTOR 

RONALD S2=T0. ACTING DIRECTOR. PARKING AUTHORITY 



MEMORANDUM 



DATE: 
TO: 

FROM: 



May 22, 2002 



Ms. Anna LaForte 

Analyst 

Budget Analyst's Office 

Ronald Szeto P^. 
Acting Director ' 
Parking Authority 



SUBJECT: City of San Francisco Ellis-O'Farrell Parking Corporation Refunding 
Bonds 



Background: 

In 1991, the Board of Supervisors approved a Lease, dated as of June 1, 1991, (the 
"Lease") between the City and County of San Francisco (die "City") and the City of San 
Francisco Ellis O'Farrell Parking Corporation (the "Corporation") for the management of 
the Ellis O'Farrell Garage (the "Garage"). Under the terms of the Lease, the Corporation is 
required to obtain City approval for the issuance of tax-exempt bonds and the execution of 
various documents relating thereto. 

Also under the terms of the Lease, the Corporation is required to solicit a professional 
parking operator through a competitive process for the daily parking management of the 
Garage and to obtain the Parking and Traffic Commission authorization to execute a 
management agreement between the Corporation and the parking operator. The 
Corporation is also required to submit an annual operating budget to the Parking and 
Traffic Commission for review and to the Controller's Office for approval. Furthermore, 
the Corporation is required to obtain the Parking and Traffic Commission authori7j=tion to 
expend funds for capital improvements to the Garage. 

In 1992. the Corporation issued Parking Revenue Bonds the ("Series 1992 Bonds") to 
seismically upgrade the Garage damaged by the Loma Prieta Earthquake and to expand 
the Garage by adding approximately 350 spaces on nvo and one-half additional parking 

levels. 



(415) S54-PARK FAX (415) 554-9234 



25 Van Necc Avenua, Sulta 410 

20 



San FrancJsco, CA 94102-457S 



. '."' Attachm ent I 

FRCi : PACKING AUTHORITY PHOt-e NG. : 5f~ '3555 p age 2 of 3 



Ms. Anna LaForte 
May 22, 2002 
Page 2 of 3 



As of May 1, 2002, the Corporation had an outstanding principal amount of S5,225,000 
of Series 1992 Bonds. Final maturity on the Parking Revenue Bonds is April 1 . 20 1 7. 
Interest rates range from 6.90% to 7.125% (the weighted average interest rate is 7. 12%) 
and the annual payment is approximately S580.000. 

Under the Indenture, dated as of January 1, 1992, between the Corporation and the Bank 
of America National Trust and Savings Association, as trustee, (the "Indenture"), capital 
improvements at the Garage are funded from the Corporation's Contingent Reserve Fund 
("Capital Improvement Fund"). Over the past several years, the Corporation has depleted 
all of the available funds in the Capital Improvement Fund on needed capital 
improvements at the Garage. In some instances our Department and the Controller's 
Office have had to utilize the Corporation's Repair and Replacement Fund to pay for 
needed capital projects. The Repair and Replacement Fund is not intended for this 
purpose. 

Pursuant to the Indenture, the Corporation retains 15% (up to 5500,000 maximum) of 
"Net" revenues from the operations of the Garage to be used for capital improvements. 
For fiscal year 2001-2002, the Corporation projects less than $40,000 of allocated "Net" 
revenue will be available to augment the Capital Improvement Fund. 

One of our goals in the refunding process is to determine a proper net revenue allocation 
for the Capital Improvement Fund. 

Proposal; 

Staff and the Corporation propose to authorize the Corporation to take advantage of 
lower interest rates by issuing refunding bonds and to apply/deposit most of the "Net" 
savings, afterpayments of the cost of issuance which shall total approximately S250.000 
into the Capital Improvement Fund. Based upon current market conditions as of May 1, 
2002, it is estimated that the depo:it to the Capital Improvement Fund would be 
approximately 5500,000. If rates were to increase 25 basis points, the amount available 
to deposit would be approximately 5453,000. 

Originally, we also proposed adjusting die net revenue allocation from 15% to 25% to 
provide needed funding into the Capital Improvement Fund and increasing the maximum 
amount of the Capital Improvement Fund from S500.000 to 52,000,000. 



21 



F?on : POKING flUTHCRITv phone no. : 53d S=?5 Attachment I 

Page 3 of 3 



Ms. Anna LaForte 
May 22, 2002 
Pace 3 of 3 



MUNI supports the Corporation's request to deposit the "Net" savings from the refunding 
into the Capital Improvement Account and agreed to further assist the Corporation by 
increasing the maximum limit from S500,000 to S750.000. However, at this time, MUNI 
does not support the extra 10% net revenue allocation to the Capital Improvement Fund. 
Hopefully, as the economy improves, the Corporation could generate higher net revenues 
and begin to adequately replenish the Capital Improvement Fund. Furthermore, MUNI 
agreed to revisit the Corporation's capital needs in the future if necessary. In the 
meantime, the Corporation could use the cash saving from the refunding to address their 
capital needs for the next several years. 

The Corporation is being assisted in this bond refunding by a team of individuals 
representing: the Department of Parking and Traffic, the Mayor's Office of Public 
finance, the City Attorney's Office, Co-Bond Counsels (Orrick, Harrington & Sutcliffe 
and Lofton and Jennings). Co-Financial Advisors (Public Financial Management and 
Municipal Capital Management), and Corporation Counsel (Mr. Richard Dole). 

As of May 1, 2002, the refunding team estimates a True Interest Cost (TIC) of (4.63% 
based on present market condition and S500.000 available from the capital improvement 
account. The filial maturity of the bonds would not be extended beyond the term of the 
Series 1992 Bonds, which is April 1, 2017. 

The cost of issuance of the refunding bonds is estimated at (S25 0.000). However, the 
Corporation would not be obligated for any significant amount should the market 
conditions change unfavorably and the refunding bonds are not issued. 

The Department recommends adoption of the proposed Resolution. 



Cc: Diana Hammons. DPT 



H '■PA.R.JCNGXJinjci" Ellit OTarrell Gjra;c''Budsr A^ly:i mcr.-io ior rc:'urJins bond: doc 



22 



Attachment II 
Page I ot J> 



SOURCES AND USES Or FUNDS 

EIliJ-O'Farrejl Parking Corporation 

2002 Refunding ofSeriei 1992 

Currt-i Market Rates u of May 7, 2002 Plus 25 Basis Points 

Coaanger.cy Futic 



Sources: 



Bond Proceeds: 

Par Amount 5,950.000.00 

Other Sources of Funds: 

Bond Funds 173.04-6. 00 

DSRF 555,693.42 

Repair and RepUceBjeau Fund 100.000.00 



Uses: 



Note: Run with A Scale Plus 25 Eisis Points and no Insurance Cost 



SSa.729.i2 



6.S3B.739.<2 



Project Fund Deposits: 

Contingent Reserve 428,000.03 

Refunding Escrow Deposits: 

Cash Deposit 0.66 

SLG Purchases 5,454.126.00 

5.454.126.65 

Other Fund Deposits: 

Debt Service Reserve Fund 565.939.99 

Repair as d Replacement Fund 100.000.00 

665,93 5.99 

Delivery Dzta Expenses: 

Cost of Issuiaee 250.00a00 

Underwriters Discount 3S,8"C.DO 

2SS.S70.00 

Other Uses of Fundi: 

Additional Proceeds 1.S02.77 

6. =33.729 42 



May 9, 2002 9:53 am Prepared by Public Fir.aeoal Miiageaner.L Inc. P»gs 1 



Attachment J 
Page 2 of 3 



SAVDs'GS 

EUii-O'FarxeU Parking Corpcntion 

2002 Refunding of Series 1992 

Cinrrn! Marjcel Rite* as of Miy 7, 2002 Plus 25 Basis Poinls 

Contingency Fuad 











Pi 


esent Vslue 




Prior 


Refunding 




to 


07/10/2002 


Date 


Debt Service 


Debt Service 


Savings 


@ 4.79!3607<w 


04/0 1/200 j 


576,820.00 


565,939.99 


10.880.01 




13,4X4.67 


CWOlCOOi 


S77.675.00 


5S9.515-S0 


18.159.50 




17,874.02 


04/01/2005 


577,000 00 


560.7G2.00 


16.238.00 




15.28566 


04/01/2006 


580.256.26 


560.272.50 


19.983.76 




17.656.05 


04/oi ac o? 


577.087.50 


S58.442.50 


15.645.00 




15,708.45 


04/01/2005 


577.850 00 


560.344.00 


17.506.00 




14.057.37 


04/01/2009 


S77.1B7.50 


560.7 14.00 


16.473.50 




12,603.80 


04/01/2010 


5S0, 100.00 


564,727.00 


15.373.00 




11,206.87 


04/01/2011 


576,231.26 


557.209.50 


19.021.76 




13.05Z24 


04/01/2012 


530,937.50 


563.842.00 


17.055.S0 




11. 180.83 


04/01/201 3 


578,506.25 


558.850.00 


19,656.26 




12.151.23 


04/01/2014 


579.293.76" 


562.578. SO 


16,715.26 




9,846.63 


04/01/2015 


577.943.76 


559,486.50 


18,457.26 




10.290.75 


04/01/2016 


579,456.16 


S59.814.50 


19.6-S1.76 




10.378.17 


04/01/2017 


578.475.00 


558.307.00 


20.173.00 




10.106.29 




8.674.B20.06 


8,4 10.800.49 


264,019.57 




194,843.04 






Sjvine: Sutarnxrv 






?Vo 


f savings from cash Cow 


154.843.04 




Lsss: 


Prior funds on hand 




-ESS, 72 


9.42 




FteE 


Refunding funds on 
V Savings 


wsid 


665.93 


9.99 




K=:P 




2.04 


3.6" I 




Upfront Savings 




425 000.00 




Total Savings 




S 430, 94 


3.51 





Run with A Scale Plus 2S Buis Poma and no Insurance Cost 



>. 2002 9.53 am Prepared by Public Frainoal Maiilgearnt, Inc. 



24 



Office of the Mayor 
san francisco 




Attachment II 

-Willie Lewis Brown, Jr. 



May 29, 2002 



TO: 



FROM: 



Anna LaForte 
Budget Analyst 

Nadia Sesay 
Public Finance 



RE: 



Up-front Savings VS Level Savings 



We typically structure bonds so that there is level debt service. Therefore, when we 
structure a refunding, it is structured for level savings, which means that debt service 
remains level but is lower. In this case, we have decided to structure the savings so 
that it is realized up front and the debt service over the remaining life of the bonds 
would remain unchanged (or reduced very slightly). Both types of structures would 
result in similar present value savings. In the first case, each year's savings would be 
discounted to the closing date to give you the present value savings. In the second 
case, the savings are already essentially discounted because they are realized on the 
closing day. 



1 DR. CARLTON B. GOODLETT PLACE. ROOM 200, SAN FRANCISCO. CALIFORNIA S4102 

(41S) 554-6141 
RECYCLED PAPER 

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^S 33333S 333^E33S^^S3s^S3^mSM^33^MMMSMM m 26 



MAY. -29' 02 (WED) 16:22 CITY k CO OF S. F. PARKING DEPT Attachment IV 



BAN PRANCiaCQ 



City and County of San Francisco 




DEPARTMENT OF PARKINa * TRAPflC 



WILLIE LEWIS BROWN, JR.. Mayor 

FRED M. HAMDUN, EXECUTIVE DIRECTOR 




PONALQ SZETQ, ACTING DIRECTOR, PARKING AUTHORITY 

MEMORANDUM 

DATE: _^ May 29, 20.02. 

TO: AnnaLaFone 

Analyst 
Budget Analyst's Office 

FROM: Ranald Szeto P^ 

Acting Director 
Parking Authority 

SUBJECT: City of San Francisco ElIis-O'Farrell Parking Corporation Refunding 
Bonds (memo 2) 



In The past years, the Corporation had extensive work done at the Garage that costs over 
SI .5 million, which was well over the amount of funds and the maximum limit of the 
Contingent Reserve Funds, Our Depannent and the Controller's were able to assist the 
Corporation with the needed repairs by utilizing another fund. However, the Contingent 
Reserve Fund is the fund established and the more appropriate funding source for this 
type of work. At this time, the Corporation has depleted the funds in the Contingent 
Reserve Fund, 

Originally, we recommended applying/depositing the cash saving from the refunding into 
the Contingent Reserve Fund, increasing the maximum amount of the from S500.000 to 
S2, 000,000 and the allocation of net revenues from 15% to 25%. However, after 
discussions with Muni, we agreed that the most beneficial proposal Is to apply/deposit the 
cash saving from the refunding into the Contingent Reserve Fund for needed 
improvements and to increase the maximum amount from S500,000 lo 5750,000 to give 
the Corporation the opportunity to retain all of the cash savings from the refunding and to 
retain a higher maximum if revenue increases in the future. 

Upon refunding the bonds and depositing the cash savings, the Corporation's Contingent 
Reserve Fund will closely approach the current maximum limit of iiOO.OOO. There is 
always the possibility thai the planned capital work for 2003 and subsequent years may 
not start or be completed exactly as scheduled within the Corporation's fiscal year. For 
this reason and the real possibility dial the economy and the garage revenues will recover 
in the near future, the proposed Contingent Reserve Fund maximum limit of S~50, 000 
will insure the availability of needed capital improvement funds without imposing a use 
or lose situation that does not have a negative financial impact to the City. 

415)SS4.PARK FAX(41S] 5M-9e:4 25 Van Neig Avenue. Suite 410 San Franclaco, CA B4103-4S7S 



JUL. -24' 02 (WED) 11:16 CITY k CO OF S. F. PARKING DEPT TEL: 415 554 9834 pagfi^fV^ 

City and County of San Francisco 




DEPARTMENT OF PAHKINQ I Traffic 



WILLIE LEWIS BROWN, JR., Mayor 

FRED M. HAMDLIN, EXECUTIVE DIRECTOR 




RONALD SZETO, ACTING DIRECTOR, PARKING AUTHORITY 

MEMORANDUM 

Date: July 24, 2002 

To: Anna LaForte 
Budget Analyst 
Office of the Budget Analyst 

From: Ronald Szeto f-£ 

Acting Director, Parking Authority 
Department of Parking and Traffic 

Re: Eilis-O'Farrell Refunding Bonds 



The purpose of this memorandum is to provide you with information on the status of the 
concerns raised at the June 5, 2002 Finance Committee when the Eilis-O'Farrell 
Refunding Bonds item was continued at the call of the Chair. 

At the June 5 th meeting, the Finance Committee asked City staff to look into the 
possibility cf using another financing vehicle to defease the outstanding bonds of the 
Eilis-O'Farrell Garage and dissolve the City of San Francisco Eilis-O'Farrell Parking 
Corporation because the Corporation appeared to be fiscally irresponsible. The Finance 
Committee was concerned by the fact that the Corporation, experiencing a lost in the last 
six months, still had not secured any agreement or potential revenue by renting, leasing or 
licensing the 121 O'Farrell Street commercial space to the small business owners already 
occupying space. 

Also, at the meeting, I informed the Finance Committee that the Department of Parking 
and Traffic was planning to license the commercial space directly from the Corporation. 
This plan would have allowed the Department the ability to assist the small business 
owners while generating rental income for the Garage. The Finance Committee said the 
Corporation has 90 days to heal any wounds. 



28 



11:16 CITY k CO OF S. F. PARKING DEPT TEUlo 554 Q 8^ Attachment V 

Page 2 o± 1 



Ms. Anna LaForte 
July 24, 2002 
Page 2 of 2 



Subsequently, the Corporation went beyond the Department's original plan by renting the 
display booths from the previous primary leasee, hired the security firm to protect the 
small business owners, hired a janitorial firm to maintain the premises, and directly 
contracted with the small business owners for the interim period, until a permanent lease 
is awarded. Moreover, the Corporation rolled-back the rental fees to the original amount 
paid by the small business owners at the 121 O'Farrell space while reducing the rent for 
the 133 O'Farrell merchants to provide a fair a competitive environment. 

The Corporation also instructed their broker to accept proposals for the 121 O'Farrell 
space until July 3 1 to provide the small business owners sufficient time to prepare and 
submit proposals and hire an outside evalualor to participate in the permanent proposal 
evaluation process. The evaluation process incorporates a 10% credit for local business. 

The Corporation will continue to directly license with each small business owner until the 
permanent leasee is identified, approved by the City, and ready for occupancy, 

Since the Corporation implemented a plan that generates revenue and accommodates the 
small business owners to the satisfaction of every party involved, the Department of 
Parking and Traffic recommends taking action on the Ellis-O'Farrell Refunding Bonds as 
originally submitted, 



\\DPT-AUM|N-21SYRyiATA\PARKINO\HuflUol ArwIytNEIIie.O'Forrall Refunding Honds, moms to Ann» UFcrlcJo 

29 



City and County of San Francisco 



Dennis J. Herrera 
City Attorney 




Attachment VI 



Office of the City Attorney 

Michael J. Martin 
Deputy City Attorney 

Direct Dial: (415)554-4648 

E-Mail: michael.martin@sfgov.org 



MEMORANDUM 
PRIVILEGED & CONFIDENTIAL 

TO: Anna LaForte 

Budget Analyst's Office 

FROM: Michael Martin 

Deputy City Attorney 

DATE: July 25, 2002 

RE: City of San Francisco Ellis-O'Farrell Parking Corporation 

This memorandum has been created in response to a inquiry from the Budget Analyst's 
office relating to the proposed refinancing of the City of San Francisco Ellis-O'Farrell Parking 
Corporation Parking Revenue Bonds, Series 1992 (the "1992 Bonds"), as to whether the City 
could directly prepay and defease the 1992 Bonds in the absence of any default by the City of 
San Francisco Ellis-O'Farrell Parking Corporation (the "Corporation"). 

The indenture relating to the 1992 Bonds does not reserve to the City the right to prepay 
the 1992 Bonds. Therefore, even if the City deposited with the trustee amounts sufficient to 
defease the 1992 Bonds, the trustee would not be able to defease the 1992 Bonds and discharge 
the indenture without the approval of the Corporation. 



30 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

Item 5 -File 02-1315 



Department: 
Item: 



Services to be 
Performed: 



Asian Art Museum 

Resolution concurring with the Controller's certification 
that janitorial services at the Asian Art Museum can be 
practically performed by a private contract at a lower cost 
than similar work services performed by City and County 
employees. 



Janitorial services at the Asian Art Museum 



Description: 



Charter Section 10.104 provides that the City may 
contract with private firms for services that can be 
practically performed for a lower cost than similar work 
performed by City employees. 

The Controller has determined that contracting for 
janitorial services at the Asian Art Museum for FY 2002- 
03 would result in estimated savings as follows: 





Lowest 


Highest 




Salary 


Salary 


Citv-Operated Service Costs 


Steo 


Step 


Salaries 


$441,559 


$522,290 


Fringe Benefits 


138,536 


151,227 


Equipment 


10.284 


10.284 


Total 


$590,379 


$683,801 


Contractual Services Cost 


(372.527) 


(372.921) 


Estimated Savings 


$217,852 


$310,880 



Comments: 



1. The Asian Art Museum closed its operations at its 
Golden Gate Park facility on October 7, 2001 and will 
reopen at its new Civic Center facility in January of 2003. 
In the past, the M.H. de Young Museum and the Asian 
Art Museum used to be located in the same building in 
Golden Gate Park. Janitorial services for the shared 
portions of the Golden Gate Park facility, including the 
entry way and the restrooms, were provided by 2.0 FTE 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

31 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



2708 Custodian positions and funded in the Fine Arts 
Museum budget. Mr. Steve Dykes of the Fine Arts 
Museum reports that the 2.0 FTE 2708 Custodian 
positions that provided janitorial services for the shared 
portions of the Golden Gate Park facility continue to be 
included in the Fine Arts Museum budget. Mr. Dykes 
further reports that these two positions currently provide 
janitorial services at the Palace of the Legion of Honor. 

In addition to the 2.0 FTE 2708 Custodian positions 
included in the Fine Arts Museum budget, for the past 
nine years the Asian Art Museum Foundation has paid 
approximately $55,000 per year for a janitorial services 
contract for the upkeep of the Asian Art Museum exhibit 
space and administrative offices at the Golden Gate Park 
facility, according to Ms. Ikuko Satoda of the Asian Art 
Museum. According to Ms. Satoda, the janitorial services 
contract for upkeep of Asian Art Museum space at the 
Golden Gate Park facility, paid for by the Asian Art 
Museum Foundation, was terminated when the Asian Art 
Museum closed its operations at its Golden Gate Park 
facility in October of 2001. In the attached memorandum 
(Attachment I), Ms. Satoda provides additional 
information on the provision of custodial services at the 
Asian Art Museum. 

Ms. Satoda advises that the janitorial services contract for 
upkeep of the Museum's new Civic Center facility is 
anticipated to begin on November 1, 2002. Therefore, the 
Fiscal Year 2002-03 Asian Art Museum budget includes 
funding of $247,000 for 8 months of a janitorial services 
contract. 

2. The Contractual Services Cost used for the purpose of 
the analysis is based on (a) the Asian Art Museum's 
estimated FY 2002-03 costs to provide janitorial services 
for a full 12 months based on the associated workload at 
the new Civic Center facility and the industry standards 
for the cost of providing such janitorial services, and (b) 
the salary and fringe benefits at the lowest and highest 
salary steps of 0.25 FTE 7120 Buildings and Grounds 
Maintenance position at the Asian Art Museum to 
monitor the contract. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

32 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



3. According to Ms. Satoda, the Department intends to 
issue a Request for Proposals (RFP) for the Asian Art 
Museum's janitorial services contract on August 28, 2002. 

4. Attachment II, provided by the Asian Art Museum, is 
the Controller's supplemental questionnaire, with the 
responses from the Asian Art Museum. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

33 



Attachment I 



Asian Art Museum of San Francisco 
Memorandum 



TO: Anna LaForte, Budget Analyst Office 

FROM: Ikuko Satoda, Asian Art Museum 

DATE: August 13, 2002 

Re: Custodial Services 



This memo is in response to your question regarding the City's responsibility in 
maintaining the City's new building, Asian Art Museum. 

For its entire existence the Asian Art Museum has relied on the promise of the City 
Charter (Sec. 16.106) to maintain the integrity of the Museum and its collections. For 
most of our history, the City contribution to security, custodial and building maintenance 
was part of the Fine Arts Museums' budget and to be performed by civil service 
employees. Nine years ago, due to the budget reduction and administrative oversight, the 
funds for services provided to FAM by the City were significantly reduced, and one 
custodial position for the AAM was eliminated. In order to maintain the building at 
Golden Gate Park at an acceptable level, the Asian Art Foundation has been 
supplementing the custodial services by engaging outside janitorial services for several 
years. 

Since we are opening a newly renovated facility, which has been paid for largely with 
private funds as a gift to the City and County of San Francisco, we were assured 
continuing City support to resume the responsibility of maintaining the City's brand new 
building by appropriating the costs of custodial services again to the Asian Art Museum. 



34 



•uc h . i crm . 



Attachment II 



CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

DEPARTMENT' Asian Art Museum 

CONTRACT SERVICES: _Janitorial Services 

CONTRACT PERIOD: CneYear 



(1) Who performed tha activity/service prior to contracting out? 
N/A since the facility is brand new. 

(2) How many City employees were laid off as a result of contracting out? 
None 

(3) Explain the disposition of employees if they were net laid off. 
N/A 

(4) What percentage of City employees' time is spent of services to be contracted out? 
N/A 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contracting out? 

Never up to new. It will be ongoing request 

(6) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent 
year? 

FY 02-03 will be the first year. 

(7) How will the services meet the gcais of your MBE/W3E Action Plan? 

Meet MBE requirement. 

(3) Does the proposed contractor provide health insurance [or its employees? 
Assumed "yes" since the vendor is on the City approved list. 

(9) Does the proposed contractor prcvide benefits to employees with spouses? If so, are the same benefits 
provided to employees with domestic partners'' If not, hew dees the proposed contractor comply with the 
Domestic Partners ordinance'' 

Assumed "yes" since the vendor Is on the City approved iist, 

(10) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 

Assumed "yes" since the vendor is on the City approved list. 

Department Representative: Ikuko Satoda 

Telephone Number: 415-557-6813 



35 



Memo to Finance Committee 
August 21, 2002 Finance Committee 

Item 6 - File 02-0416 



Department: 



Item: 



Amount: 
Grant Period: 

Source of Funds: 
Required Match: 



Indirect Costs: 



Description: 



Municipal Transportation Agency (MTA) 
Municipal Railway (MUNI) 

Resolution authorizing the Municipal Transportation 
Agency Board to accept and expend $15,925,000 of 
Federal Formula Section 5307 Capital Assistance funds 
for the MTA Motor Coach Replacement Project for the 
purchase of 330 new Neoplan diesel buses. 

$15,925,000 

July 1, 2002 through December 30, 2006 (four years and 
six months). According to Mr. Jerry Levine of MTA, MTA 
has not accepted or expended any funds. 

Federal Transit Administration (FTA) 

The required match of $3,261,747 or 20 percent (See 
Comment 2) would be composed of Municipal Railway 
Fare Revenue, San Francisco County Transportation 
Sales Taxes, Bridge Toll Net Revenues, and funds from 
the San Francisco Municipal Railway Improvement 
Corporation. 

MTA is requesting that indirect costs be waived to 
maximize use of the grant funds to acquire the new 
Neoplan buses. 

The proposed resolution would authorize MTA to accept 
and expend $15,925,000 of Federal Section 5307 Capital 
Assistance funds to partially pay for the total 
$128,229,473 in estimated costs to purchase 330 new 
Neoplan diesel buses under the Motor Coach Replacement 
capital project. As shown in Attachment I, the FTA will 
pay for $102,583,578, or 80 percent of the total cost of the 
$128,229,473, with the balance of 20 percent coming from 
various local sources as identified in Attachment I. 
According to Mr. Levine, the 330 new Neoplan diesel 
buses would replace 330 aged New Flyer diesel buses 
operating throughout the City. Mr. Levine advises that 
MTA would only replace diesel buses that have been in 
service longer than their 12-year useful life spans, and 



36 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

that none of the 330 new Neoplan buses would be used to 
expand the existing fleet. MTA presently has an existing 
fleet of 455 diesel buses. 

On February 5, 1999 the Board of Supervisors approved a 
multi-year $92,192,575 procurement contract between 
MTA and Neoplan USA Corporation for the purchase of 
235 new diesel buses, at an average cost per bus ranging 
from $319,781 for a 40-foot standard bus to $427,034 for a 
60-foot articulated bus, to replace aged diesel buses (File 
98-2129). According to Mr. Levine, Neoplan USA was 
selected through a competitive negotiated procurement 
process based on the technical quality and price of their 
buses. In June of 2001, the Board of Supervisors 
approved Modification No. 4 to the original contract with 
Neoplan USA (File 01-0869). The original contract 
provided for the procurement of 235 diesel buses. 
Modification No. 4 provided an additional 95 buses, 
resulting in a total procurement of 330 buses. The cost 
for the 95 buses under Modification No. 4 was not to 
exceed $36,036,898, at an average cost per bus ranging 
from $328,109 for a 40-foot bus to $440,340 for a 60-foot 
bus. The combined cost of the original contract and 
Modification No. 4 was $128,229,473 and the total 
number of diesel buses authorized for purchase was 330. 
This resolution would now authorize the MTA to accept 
$15,925,000 in Federal grant funds to partially pay for 
the total cost of the 330 new diesel buses. 

Budget: Attachment I, provided by Mr. Levine, includes a budget 

and all funding sources totaling $128,229,473 to pay for 
the acquisition of the 330 new Neoplan buses. 

Comments: 1. According to Mr. Levine, MTA would cover the ongoing 

maintenance costs for the 330 new diesel Neoplan buses, 
estimated at approximately $6,006,000 annually, through 
annual appropriations in MTAs operating budgets. Mr. 
Levine advises that the $6,006,000 in annual 
maintenance costs for the 330 new Neoplan buses would 
be primarily attributable to mandatory standard 
maintenance checks. Mr. Levine advises that the 
estimated ongoing maintenance cost for the new Neoplan 
buses would be approximately the same as the cost for 
older diesel buses because both the old and new buses 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

37 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



require regularized maintenance at 1,000 mile and 6,000 
mile intervals. 

2. As shown in Attachment I, Mr. Levine advises that 
MTA will provide $25,645,895 in local funds or 20 percent 
of the total costs of $128,229,473 for the Motor Coach 
Replacement contract, composed of Municipal Railway 
Fare Revenue, San Francisco County Transportation 
Sales Taxes, Bridge Toll Net Revenues, and funds from 
the San Francisco Municipal Railway Improvement 
Corporation for the acquisition of the 330 Neoplan buses. 
Mr. Levine reports that of the total $25,645,895 in local 
funds allocated to the Motor Coach Replacement contract 
from the various local sources listed in Attachment I, 
$20,843,061 has already been received, $3,261,747 will be 
received as subject matching funds and $1,541,087 is 
anticipated by December 2003. 

3. As previously noted, according to Mr. Levine, FTA 
funds would provide $102,583,578 or 80 percent of the 
total $128,229,473 Motor Coach Replacement contract to 
purchase the 330 new Neoplan diesel buses. Of the 
$102,583,578 in FTA funds provided for the Motor Coach 
Replacement contract, Mr. Levine states that $83,372,245 
has already been received from the FTA, $15,925,000 will 
be received under the proposed resolution, and $3,286,333 
is anticipated to be received from the FTA by December 
2003. 

4. Attachment II, provided by Ms. Lisa Mancini of MUNI, 
provides additional information regarding the Motor 
Coach Replacement Program. 

5. Attachment III is the Grant Information Form, 
provided by Mr. Levine, which includes the Disability 
Access Checklist. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

38 



CONTRACT #300 MASTER PAYMENT RECORD 



No. |Qty. iDsscrlptlon |UnltPrlCB |Total Price 


40-FOOT BASE CONTRACT 


1 




Prototype Design, Testing and Acceptance 


Lump Sum 


$45,000.00 


2 


135 


New Standard High Floor Clean Diesel 
Coaches 


5319,781 


$43,170,435.00 


3 




Spare Parts for Standard High Floor Clean 
Diesel Coaches (from Schedule 3A) 


Lump Sum 


$3,031,635.00 


4 




Training for Standard High Floor Clean Diesel 
Coaches 


Lump Sum 


$33,750.00 


5 




Interactive Multimedia Training for Standard 
High Floor Clean Diesel Coaches 


Lump Sum 


"$125,000.00 


6 




Operating, Maintenance and Parts Manuals 
for Standard High Floor Clean Diesel Coaches 


Lump Sum 


$132,995.00 


7 




Special Tools for Standard High Floor Clean 
Diesel Coaches (from Schedule 3B) 


Lump Sum 


$451,290.00 


Total: $46,990,305.00 



Attachment I 
Page 1 of 2 



60-FOOT BASE CONTRACT 


1 




Prototype Design, Testing and Acceptance 


Lump Sum 


$45,000.00 


2 


100 


New Articulated High Floor Clean Diesel 
Coaches 


$427,034 


$42,703,400.00 


3 




Spare Parts for Articulated High Floor Clean 
Diesel Coaches (from Schedule 1A) 


Lump Sum 


$1,826,655.00 


4 




Training for Articulated High Floor Clean 
Diesel Coaches 


Lump Sum 


$33,750.00 


5 




Interactive Multimedia Training for Articulated 
High Floor Clean Diesel Coaches 


Lump Sum 


$125,000.00 


6 




Operating, Maintenance and Parts Manuals 
for Articulated High Floor Clean Diesel 
Coaches 


Lump Sum 


$132,995.00 


7 




Special Tools for Articulated High Floor Clean 
Diesel Coaches (from Schedule 1B) 


Lump Sum 


$335,470.00 


Total: $45,202,270.00 



Base Contract Total: 



$92,192,575.00 



Total Payment: 



40-FOOT OPTION CONTRACT 


B.1 


71 


Exercise of Option to purchase Standard High 
Floor Clean Diesel Coaches 


$328,109 


$23,295,739.00 


9 




Additional Spare Parts 


Lump Sum 


$1,164,786.00 


10 


135 


Design Changes 


$983 


$132,705.00 




Total: 


$24,593,230.00 



60-FOOT OPTION CONTRACT 


8.1 


24 


Exercise of Option to purchase Standard High 
Floor Clean Diesel Coaches 


$440340 


$10,568,160.00 


9 




Additional Spare Parts 


Lump Sum 


$528,408,00 


10 


100 


Design Changes 


$3,471 


$347,100.00 




Total: 


$11,443,568.00 



Option Contract Tota I : 



$36,036,898.00 



Contract Grand Total: $128,229,473.00 



39 



Attachment I 
Page 2 of 2 



FUNDING SOURCES FOR CONTRACT #300 



Funding Source 


Amount 


Percentage Share 


Federal - Federal Transit Administration 


$102,583,578 


80 percent 


Local - 

• Municipal Railway Fare Revenue 

• San Francisco County Transportation Sales 
Taxes 

• Bridge Toll Net Revenues 

• San Francisco Municipal Railway 
Improvement Corporation 


$25,645,895* 


20 percent 


Total Contract 


$128,229,473 


100 percent 



*Due to the fact that local matching funds are assigned to various elements of the Motor Coach 
Replacement project as they are awarded and also assigned according to the timely use of funds 
requirements, the $25,645,895 in local funds required for the contract cannot be specifically 
dedicated by fund source. 



Provided by Muni 



40 




Attachment II 
Pa<?e 1 of 2 



Municipal Transportation Agency 
City and County of San Francisco 




To: Harvey Rose 

Budget Analyst 

From: Lisa Mancini 

Deputy Director 

Municipal Transportation Agency 

Date: August 9, 2002 

Subject: Accept and expend grant for Motor Coach replacement 

The purpose of this memorandum is to provide the Budget Analyst with information pertaining 
to Muni's Contract No. 300 with Neoplan USA Corporation. 

In March 2001, Muni received approval to exercise an option with Neoplan to purchase 95 
replacement motor coaches (71 standard and 24 articulated). Muni is requesting that this 
resolution to accept and expend 515,925,000 of Federal Section 5307 formula Capital Assistance 
be expedited to ensure timely payment to Neoplan for Muni's motor coach replacement program. 
Muni has a contractual obligation to make these timely payments. Neoplan has much of its 
working capital invested in Muni's fleet, and needs to receive one of the last of their payments in 
order to invest in other projects and contracts. 

These 95 motor coaches are well into production on the assembly line. Out of the 95 option 
buses, 68 of the 71 40-foot standard buses and 4 of the 24 60-foot articulated buses have been 
delivered to Muni to date. The remaining buses will be delivered during August and September 
of this year. 

Neoplan has given Muni no indication that it will not meet any of its contractual obligations, 
including delivery of all of its buses and fulfillment of all warranty requirements that are 
specified in the contract. Per this contract, Neoplan will provide all warranty support for the 
complete motor coach, including the structural frame, components, defects, and all computer 
software. 

Specifically, according to Section 9.1.1.1 of Contract No. 300 with Neoplan, the complete coach 
"shall be warranted and guaranteed to be free from defects and related defects for two years or 
100,000 miles, whichever comes fust, beginning on the date of official acceptance of each coach. 
During this warranty period, the coach shall maintain its structural and functional integrity. The 
warranty shall be based on regular operation of the coach under the operating conditions 
prevailing in Muni service." 

In addition, according to Section 9.1.1.2, "primary load carrying members of the bus structure, 
including structural elements of the suspension, shall be warranted against corrosion failure 



41 



Attachment II 
Page 2 of 2 
Municipal Transportation Agency 
City and County of San Francisco 



and/or fatigue failure sufficient to cause physical safety or Mean Distance Between Service 
Failure (MDBSF) for a period of 12 years or 500,000 miles, whichever comes first." 

All other components, including engine, engine starting system, engine alternators, transmission, 
axles, suspension, brakes, heating and ventilation units, hydraulic fan, power steering systems, 
wheelchair lifts and ramp system, destination sign and voice annunciation system, door system, 
and air system have warranties ranging from 3-5 years (or 150,000-300,000 miles, whichever 
occurs first). 

Muni has had a solid working relationship with Neoplan since 1998, and will continue to work 
closely with them as the last of the motor coaches arrive. 



42 



Accacnmenc 111 
Page 1 of 2 

FUe Number: 

(Provided by Clerk of Board of Supervisors) 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and expend 
grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: FTA Grant # CA-90- Yl 24 for $ 1 5,925,000 in formula federal funds for Municipal Railway 
Capital Projects and Activities. 

2. Department: San Francisco Municipal Railway. 

3. Contact Person: Jerry Levine Telephone: 934-3939 

4. Grant Approval Status (check one): 

□ Approved by funding agency EED Not yet approved 

5. Amount of Grant Funding Approved or Applied for: 515,925,000 

6. a. Matching Funds Required: $3,261,747 

b. Source(s) of matching funds (if applicable): The nonfederal share of project costs will be funded through a 
variety of sources which may include San Francisco Municipal Railway Fare Revenue, San Francisco 
Municipal Railway Improvement Corporation, San Francisco County Transportation Sales Taxes, Bridge 
Toll Net Revenues and/or Redevelopment revenues. 

7. a, Grant Source Agency: Federal Transit Ailministration 

b. Grant Pass-Through Agency (if applicable): Not applicable 

8. Proposed Grant Project Summary: 

The Board of Supervisors is being asked for authority to accept and expend $15,925,000 of formula 
federal funds for San Francisco MUNI capital project Motor Coach replacement. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: 07/01/02 End-Date: 12/30/06 

10. Number of new positions created and funded: None 

11. If new positions are created, explain the disposition of employees once the grant ends? N.A. 



43 



Page 2 of 2 
Grant Information Form Page 2 

12. a. Amount budgeted for contractual services: $15,925,000 

b. Will contractual services be put out to bid? Yes 

c. If so, will contract services help to further the goals of the department's MBE/WBE requirements? Yes 
i Is this likely to be a one-time or ongoing request for contracting out? One-time 

13. a. Does the budget include indirect costs? Yes No X 
bl . If yes, how much? 

h2. How was the amount calculated? 

c. If no, why are indirect costs not included? 

Not allowed by granting agency _X To maximize use of grant funds on direct services 

Other (please explain): 

14. Any other significant grant requirements or comments: None 
Disability Access Checklist 

15. This Grant is intended for activities at (check all that apply): 

Existing Site(s) Existing Structure(s) 03 Existing Program(s) or Service(s) 

Rehabilitated Site(s) Rehabilitated Structure(s) New Program(s) or Service(s) 

New Site(s) New Structure(s) 

16. The Departmental ADA Coordinator has reviewed the proposal and concluded that the project as 
proposed will be in compliance with the Americans with Disabilities Act and all other Federal, State and 
local access laws and regulations and will allow the full inclusion of persons with disabilities, or will require 
unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental ADA Coordinator: Annette Williams 

(Name) 

Date Reviewed: 



Department Approval: Annette Williams, Manager of Accessible Services 

(Name and Title) 



(Signature) 



44 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

Item 8 - File 02-1290 



Department: 
Item: 



Amount: 
Source of Funds: 



Description: 



Airport 

Resolution approving Modification No. 7, the Close-out 
Modification, to Professional Services Agreement, 
Contract 5700CM - Construction Management Services 
for the AirTrain System, with PGH Wong 
Engineering/Luster Construction Management, in the 
amount of $2,644,367, for a new total contract amount not 
to exceed $32,847,364. 

$2,644,367 (see Comment No. 7) 

Master Plan Capital Improvement Program 

- Airport Revenue Bonds Issue 16A/13B: $1,417,408 
Airport's contribution - BART Fixed Facilities 

- Airport Revenue Bonds Issue 16A: 76,959 
Airport's contribution - BART Systems 

- Airport Revenue Bonds Issue 16A: 1.150,000 
TOTAL: $2,644,367 

On May 16, 1995 the Airport Commission awarded a 
Professional Services Contract to a joint venture of PGH 
Wong Engineering and Luster Construction Management 1 
in the amount of $1,400,000, to provide construction 
management services for the AirTrain System to be 
constructed at the Airport 2 . According to Mr. Ivar Satero 
of the Airport, the contract was designed as a year-to-year 
contract, renewable on an annual basis, rather than as a 
multi-year contract, to permit the Airport to determine 
annually whether or not it was satisfied with the 



1 In addition to the two joint venture partners, PGH Wong Engineering, Inc. and Luster 
Construction Management, the original contract included four sub-consultants: CPM Services, EPC 
Consultants, Inc., AL Consulting, and O'Brien Kreitzberg Inc. Subsequently, the following sub- 
consultants were added to the contract: Lea + Elliot, Inc., National Constructor's Group, Transit 
Guideway Consultants, Battelle, Logplan LLC, MG Engineering, Fay & Associates, and Leigh Fisher 
Associates. 

2 The AirTrain system will be a fully automated transit system used to transport passengers and 
Airport personnel between the Airport's terminals, parking structures, rental car facilities, cargo 
facilities, and remote parking facilities. The system comprises (a) the computerized AirTrain 
Operating System and the Central Control Facility, (b) a 7,000 foot clockwise Inner Loop track, a 
7,000 foot counter-clockwise Outer Loop, and an approximately 1.5 mile dual lane track out to the 
remote parking facilities, (c) six stations, (d) 38 passenger vehicles and one maintenance recovery 
vehicle, and (e) five power distribution substations. 

Board of Supervisors 
Budget Analyst 
45 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



contractor's performance. Subsequently, the Airport 
Commission approved six modifications to the subject 
contract to fund PGH Wong Engineering/Luster 
Construction Management to provide ongoing 
construction management services for both: 

(a) The AirTrain System and Related BART Fixed 
Facilities Project. BART fixed facilities related to 
construction of the AirTrain System include the 
combined structures supporting both the AirTrain 
and BART train-track beds. 

(b) Oversight of the Airport's share of the BART systems 
costs of the BART-SFO Extension construction 
project, which is a component of the current BART- 
managed project to extend the BART system from 
Colma to San Francisco Airport and Millbrae. 

As shown in Attachment I, provided by Mr. Satero, the 
current total value of the PGH Wong Engineering/Luster 
Construction Management contract is $32,847,367 
including the proposed Contract Modification No. 7 in the 
amount of $2,644,367. 

According to Mr. Satero, the proposed Contract 
Modification No. 7 would permit PGH Wong 
Engineering/Luster Construction Management to: 

(a) Provide construction management services during 
the construction completion, start-up testing, and 
close-out phases of the AirTrain System and Related 
BART Fixed Facilities Project. According to Mr. 
Satero, Contract Modification No. 7 was predicated 
on an anticipated opening of the AirTrain System in 
September of 2002. Due to an accident which 
occurred on August 4, 2002 during testing of the 
AirTrain System, the opening may be delayed by 
approximately two months, until October 31, 2002. 
A collision between two computer-controlled trains 
resulted in damage to both cars, train-track 
equipment, and the emergency walkway. Mr. Satero 
expects that the Airport will require additional PGH 
Wong Engineering/Luster Construction Management 
staff time to audit the records and test program of 

Board of Supervisors 

Budget Analyst 

46 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



Budget: 



the AirTrain Operating System contractor, 
Bombardier (see Comment No. 3). 
(b) Oversight and final cost reconciliation of the 
Airport's portion of the BART systems costs of the 
BART-SFO Extension Project. These projects 
include installing the rail lines into the Airport, 
constructing the power distribution, train control, 
bulk power supply, and emergency smoke removal 
systems, and building the five power distribution 
substations. Mr. Satero forecasts that construction 
will be completed by January of 2003. 

Attachment I provides descriptions and budget details of 
the original contract and all contract modifications to 
date, including the proposed Contract Modification No. 7. 
A summary of the contract costs is as follows: 



Contract Modifications 


Amount 


Original contract 

Contract Modifications No. 1-6 

Contract Modification No. 7 


$1,400,000 

28,803,000 

2.644.367 


TOTAL: 


$32,847,367 



Comments: 



1. According to Mr. Satero, the original $1,400,000 
contract was awarded to PGH Wong Engineering/Luster 
Construction Management following a Request for 
Qualifications process. 

2. Under Charter Section 9.118(b), all contracts which 
are in excess of $10,000,000 or which have a term of ten 
years or more, except for construction contracts, are 
subject to Board of Supervisors approval. As shown in 
Attachment I, the contract with PGH Wong 
Engineering/Luster Construction Management totaled 
$10,023,000 with the authorization of Contract 
Modification No. 2, thereby exceeding the $10,000,000 
threshold by $23,000. Contract Modifications Nos. 3 
through 6 were not submitted to the Board of Supervisors 
for approval. On May 31, 2002, the City Attorney issued 



Board of Supervisors 
Budget Analyst 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



Opinion No. 2002-03 pertaining to the application of 
Charter Section 9.118(b) stating that: 

The City Attorney's Office has received questions in the 
past concerning the application of Charter section 9.118(b) 
to construction-related professional services contracts. 
Although we have not previously issued formal advice on 
these questions and they have arisen infrequently, deputies 
have given varying advice to departments concerning this 
provision. 

In Opinion No. 2002-03, the City Attorney advises, with 
respect to contracts pertaining to architectural, 
engineering, and construction management services, that 
Board of Supervisors approval is now required for 
contract modifications, if the modification causes the 
cumulative amount of the contract to exceed $10 million, 
or causes the term of the contract to exceed 10 years. 

Therefore, according to Ms. Gretchen Nicholson of the 
City Attorney's Office, the City Attorney has concluded 
that the proposed subject Contract Modification No. 7 is 
subject to Board of Supervisors approval. 

3. Mr. Satero states that the Airport anticipates a 
Contract Modification No. 8 due to the accident which 
occurred on August 4, 2002 during testing of the 
computer-controlled AirTrain System. Mr. Satero expects 
that the Airport will require additional PGH Wong 
Engineering/Luster Construction Management staff time 
to audit the records and test program of the AirTrain 
Operating System contractor, Bombardier. At the time of 
writing this report, the Airport has neither estimated the 
number of additional staff hours required nor the total 
cost of the anticipated Contract Modification No. 8. 
Contract Modification No. 8 would be subject to Board of 
Supervisors approval. 

4. According to Mr. Satero, construction of the AirTrain 
System and Related BART Fixed Facilities Project is 
approximately 97 percent complete. However, at this 
time, Mr. Satero estimates that the AirTrain System 
should be operational as of October 31, 2002. Mr. Satero 
advises that before the August 4, 2002 accident the 

Board of Supervisors 
Budget Analyst 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



AirTrain System had already been approximately 8.5 
months behind schedule as a result of: 

• Late completion in December of 2000 of segments of 
the AirTrain train-track bed by the Tutor-Saliba 
Corporation, which delayed access for construction of 
the terminal stations by another contractor, DJ 
Amorosa. 

• The delayed terminal station construction, along with 
several required design changes at the stations, 
delayed development and testing of the computerized 
AirTrain Operating System provided by another 
contractor, Bombardier. 

Attachment II is a memo, provided by Mr. Satero, which 
contains additional information about the AirTrain 
System construction project delays which preceded the 
August 4, 2002 accident. 

5. According to Mr. Satero, construction by BART of the 
BART systems portion of the BART-SFO Extension 
Project was originally scheduled for completion in 
December of 2001. However, due to construction delays 
caused by the Joint Powers Board 3 restrictions and 
requirements for working within the Joint Powers Board 
right-of-way and the need to protect an endangered 
species of wetland snake, construction is now scheduled to 
be operational in January of 2003. 

6. According to Mr. Satero, the total cost to the Airport of 
the AirTrain System and Related BART Fixed Facilities 
Project is $425,417,522, and the Airport's total share of 
the BART systems portion of the BART-SFO Extension 
Project is $74,700,000 4 , for a total cost of $500,117,522. 
Therefore, the total $32,847,367 cost of the Airport's 



3 The Joint Powers Board is the managing authority responsible for the Caltrain rail system. The 
membership of the Joint Powers Board includes the City and County of San Francisco, the San 
Mateo County Transit District, and the Santa Clara Valley Transportation Authority. According to 
Mr. Satero, approximately 75 percent of the construction work related to the BART-SFO Extension 
Project took place within Caltrain's right-of-way which necessitated significant protection 
requirements for Caltrain during the excavation work. 

4 Mr. Satero advises that the Airport's share of the BART systems portion of the BART-SFO 
Extension Project was determined in conformance with Federal Aviation Administration eligibility 
guidelines. 

Board of Supervisors 

Budget Analyst 
49 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



contract with PGH Wong Engineering/Luster 
Construction Management to provide construction 
management services represents approximately 6.6 
percent of the Airport's total costs for the AirTrain and 
BART projects. According to Mr. Satero, while the 
Airport budgets 5 percent for construction management 
services, it adjusts this percentage to provide for project- 
specific requirements which vary based on a construction 
project's technical complexity, schedule, coordination 
requirements, involvement of other agencies, and other 
factors. Mr. Satero states that the cost of the PGH Wong 
Engineering/Luster Construction Management contract, 
at 6.6 percent of the Airport's total costs for the AirTrain 
and BART projects, is lower than anticipated given the 
AirTrain System's technical complexity, the degree of 
interface with adjacent projects, the construction delays to 
date, and the current testing which is ongoing 24 hours 
per day, seven days per week. For the Master Plan 
Expansion Project as a whole, the Airport has experienced 
a 6.9 percent construction management services cost, 
according to Mr. Satero. 

7. As previously noted, the proposed Contract 
Modification No. 7 would increase the total PGH Wong 
Engineering/Luster Construction Management cost by 
$2,644,367, from $30,203,000 to $32,847,367. The 
proposed resolution states that the total would be 
$32,847,364, or $3 less than the actual amount. The 
proposed resolution should be amended to total 
$32,847,367. 



Board of Supervisors 
Budget Analyst 

50 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



Recommendations: 1. Amend the proposed resolution to reflect the correct 

total construction management services contract amount 
of $32,847,367 instead of $32,847,364. 



2. Approve the proposed resolution, as amended. 



Board of Supervisors 

Budget Analyst 

51 



Aug. 3.2002 2:22PM SFIA BDC 650 321-7799 



Attachment I 



io, /mH i/i 



Page 1 of 3 

San Francisco International Airport 



MEMORANDUM 



P.O. Box £097 

San Francisco, CA 04123 

Tel 650.821.5000 

Fax 650.621.5005 

www.flysfb.com 



TO: Budget Analysts' Office 

FROM: Ivar Satero, Administrator 

Bureau of Design & Constru 

DATE: August 8, 2002 

AIRPORT 

commission PROJECT: File 02-1290 



CITV AND COUNTT 
OFSANTRANCISCO 



run L ShowM, JR 
(KArnff 



HENRY E SERMAN 




Modification to Airport Contract 5700. CM - Professional Services 
Agreement with PGH Wong Engineering/Luster Construction 
Management 

SUBJECT: Summary of Modifications and Funding 



LARflV MAZZOIA 

net enesiDiuT 



MlCMAFl 5-STtIU«5<T 



LINDA S.ChAVTON 



john i. mahtin 

UltlPORT DIUCCTOR 



As per your request, we are providing additional information regarding previous 
modifications to the Airports 5700.CM contract with the joint venture of PGH Wong 
Engineering/Luster Construction Management (Wong/Luster). This contract provides 
for construction management (CM) services for: SFO's AirTrain System and Related 
BART Fixed Facilities Project, which are the BART fixed facilities constructed 
integrally with the AirTrain System and include the combined structures supporting 
both the AirTrain and BART train-track beds; and, oversight of the Airport's share of 
the BART systems costs of the BART-SFO Extension construction project, which is a 
component of the current BART-managed project to extend the BART system from 
Colma to SFO and Millbrae. 

The services to be provided by the CM consultants in support of the Airport Master 
Plan Expansion Program are described generally in Appendix A of the Professional 
Services Agreement between the Airport and consultants. The Airport developed a 
Program Management Manual for implementation by the CM consultants as a 
minimum Airport requirement for administering and managing construction contracts. 
The scope of services to be provided by the consultants did not change at each annual 
modification. The annual modifications typically provided for additional funding, 
administrative contractual changes and extensions to duration. 

Exhibit A attached to this memo summarizes the modifications to the contract and 
provides a budget breakdown for the allocation of costs to AirTrain as part of the 



52 



2:23PM SFIA BDC 650 821-7799 Attachment ; H7I93 P. 3/4 

Page 2 of 3 



Master Plan Expansion Program and the Airport's "up to $200 million" contribution 
to the BART-SFO Extension Project. The budget allocations between the AirTrain 
and BART Fixed Facilities is based on a 93.61% Airport/6.39% BART split. This 
split was determined and agreed upon by both parties during the development of the 
BART-SFO Extension Project - Project Development Agreement, dated April 8, 
1997. The budget for the BART Systems is allocable 100% to BART. 

Further, Exhibit A provides a comparison of the modification amounts to 
Wong/Lusters' annual Staffing Plan funding request, with manhours. Typically, the 
Airport requested from Wong/Luster a proposed "ideal" staffing plan for the next year 
and a staffing plan through to project completion to assist in updating the forecast-at- 
completion. Wong/Luster was also given a target budget and was required to submit 
a staffing plan that correlated with the target budget. The Airport would then meet 
with the Principal of Wong/Luster and review the target budget staffing plan position 
by position to determine whether additional positions or manhours were required for 
each function. The negotiated agreed-upon staffing plan would typically increase the 
target budget but would be within the overall project budget. The modification 
amount would be further adjusted to account for any anticipated under-run or overrun 
from the previous year. 

If you have any questions regarding on this information, please don't hesitate to call. 



53 



Aug. a. 



j: ibr'M 



bflA BUL doU Bil-//SS 



no. / ISO r, 

Attachment I 
Page 3 of 3 



LI L 



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Commission 

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54 



om: BDC To: Alan Gibson 



Date: 8/7/2002 Time: 11:57.24 AM 




San Francisco International Wrpoi 



Attachment II 
Page 1 of 2 



MEMORANDUM 




TO: Budget Analysts' Office 

FROM: Ivar Salero, Administrator 

Bureau of Design &. Co 

DATE: August 7, 2002 

PROJECT: File 02-1 290 

Modification to Airport Contract 5700.CM - Professional Services 
Agreement with PGH Wong Engineering/Luster Construction 
Management 

SUBJECT: AirTrain Construction Project Delays 



The SFO AirTrain project is currently scheduled to complete in September 2002. The 
original contract completion date for the 5703. A • AirTrain Operating System contract 
with Bombardier Transportation (formerly Adtranz) is December 1 5, 2001. This is 
the final contract to complete for the opening of AirTrain. There have been a number 
of significant issues encountered throughout the 5 (five) plus years of construction of 
the various contracts required for the implementation of the AirTrain System which 
have contributed to this delay. 

One of the first construction contracts for AirTrain was the 5700.A - AirTrain 
Guideway, East Loop contract with Tutor-Saliba Corporation. This contract was 
scheduled to complete in February 2000. it was completed in December 2000. 
approximately 10 months behind schedule. These delays were unavoidable and 
resulted from a number of differing site conditions as well as construction restrictions 
due to Airport operations. The construction occurred around the domestic terminal 
loop, both within the existing Central Garage and in the roadways. Due to the age of 
the existing facilities, there were a significant number cf utility conflicts and 
underground conditions not identified which contributed to the delay. It was not 
possible to mitigate the delays to this contract due to Airport operational requirements 
and site restrictions. 

The late completion of the 5700. A contract delayed access to the 5706. A - AirTrain 
Domestic Stations contract. This contract provides for the construction of the 



55 



From: BDC To. Alan GiBson . _. TT 

Attachment II 
Page 2 of 2 



concourse level of the station, platform canopies, conveyances, windscreens, 
pedestrian bridges and garage connectors. The late access delay was not recoverable, 
due to the Airport compressing the construction schedule as a result of the anticipated 
late completion of the 5700. A contract, Airport operational requirements and site 
restrictions. 

Coordinated access was granted to the 5703. A contractor for the installation of the 
structural steel and barrier wall station doors (the glass doors that open and close with 
the train doors) as early as possible to minimize the impact resulting from the 
subsequent construction delays, while assuring a safe working environment. 
However, design changes to the structural steel supporting the barrier wall and station 
doors was required which further delayed the 5703. A contractor. This "Airport" 
delay was concurrent with the delays in the development and testing of Bombardier's 
"Flexiblok" automated train control system, which ultimately drives out the AirTrain 
opening date to September 2002. 

Given die multitude of construction challenges encountered during the AirTrain 
construction project, the technical complexity of the various contracts and interfaces 
with existing Airport facilities and on-going related construction, PGH Wong 
Engineering/Luster Construction Management has served the Airport well. They have 
taken appropriate actions to minimize impacts to cost and schedule as a result of the 
numerous unforeseeable issues. They have accelerated work when appropriate, 
directed resequencing due to access delays, coordinated access and construction 
activities for the safe prosecution of the work under the various contracts. 

If you have any questions regarding this information, please don't hesitate to call. 



56 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



Item 9 - File 02-1324 

Department: 

Item: 



Location: 



Purpose of Lease: 



Lessor: 



Lessee: 



Annual Rental 
Revenues Payable by 
Wells Fargo Bank to 
the Airport: 



Airport 

Resolution approving the Domestic Terminals Automated 
Teller Machine Lease A between Wells Fargo Bank, NA. 
and the City and County of San Francisco, acting by and 
through its Airport Commission, for the operation of ten 
automatic teller machines (ATMs) at the Airport's North 
and South Terminals and the Airport's Rental Care 
Facility. 

The North and South Terminals and the Rental Car 
Facility, San Francisco International Airport 

The proposed new five year and 90 day lease would 
provide space at ten locations throughout the Airport's 
North and South Terminals and the Airport's Rental Car 
Facility to Wells Fargo Bank, NA. to operate one 
automated teller machine (ATM) at each of the ten 
different locations. These ten ATMs would operate 24 
hours per day, seven days a week at the locations listed in 
the Attachment provided by the Airport. 

City and County of San Francisco, acting by and through 
its Airport Commission. 

Wells Fargo Bank, N.A., a California corporation 



Minimum Annual Guarantee (MAG) of $282,000, to be 
adjusted annually by the percentage increase in the 
Consumer Price Index's "All Urban Consumers - Other 
Goods and Services" index and in accordance with 
enplanement data as specified in the proposed lease. In 
no event would the MAG be less than the prior year's 
amount. In addition to the MAG, Wells Fargo Bank 
would pay the Airport: 

• A percentage rent of 33 percent of any commission, 
surcharge, or other fee charged by Wells Fargo Bank 
to an ATM customer. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

57 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



• A transaction rent of $0.10 for each customer use of a 
Wells Fargo Bank ATM. 1 

• A promotional charge of $1.00 per square foot per year, 
if the Airport launches an Airport marketing and 
promotional campaign. 

According to Mr. David Pfeiffer of the Airport, under the 
existing lease between the Airport and Wells Fargo Bank, 
N.A., which began on February 16, 1998, Wells Fargo 
Bank will pay the Airport, for the last year of the lease, 
from February 16, 2002 to February 15, 2003, (a) the 
required MAG of $204,234, and (b) a percentage and 
transaction rent estimated at $114,038, for a total 
estimated payment by Wells Fargo Bank to the Airport of 
$318,272. 

As stated above, under the proposed lease, Wells Fargo 
Bank is required to the pay the Airport a MAG of 
$282,000 for the first year of the proposed lease. Mr. 
Pfeiffer advises that the Airport is unable to estimate the 
amount of the percentage and transaction rent for the 
first year of the proposed lease payable by Wells Fargo 
Bank to the Airport because of the current uncertain 
economic conditions. 



Term of Lease: 



Right of Renewal: 



The MAG of $282,000 for the proposed lease to operate 
ten ATMs is $77,766 or approximately 38.1 percent more 
than the MAG of $204,234 for the last year of the existing 
lease to operate ten ATMs. 

The proposed lease would be for a term of five years and 
up to an additional 90 days for initial construction of 
required tenant improvements, commencing no earlier 
than February 16, 2003. 

The Airport would have sole discretion to grant two one- 
year extensions. 



Utilities and Janitor 
Provided by Lessor: 



Wells Fargo Bank would pay for the cost of all utilities 
and janitorial services. 



1 The transaction rent would not be payable with respect to (a) commissions, surcharges, or 
other fees on which percentage rent is payable, and (b) ATM customer transactions which are 
aborted. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
58 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



Tenant 
Improvements: 



Description: 



Comments: 



Wells Fargo Bank is required to spend at least $250 per 
ATM location to renovate its ten existing ATM locations 
within 90 days, for a total estimated cost of at least 
$2,500 2 . 

On May 7, 2002, the Airport Commission authorized 
Airport staff to accept competitive bids to operate a total 
of ten ATMs in the Airport's North and South Terminals 
and the Airport's Rental Car Facility (Domestic Terminals 
ATM Lease A 3 ). Subsequently, on July 9, 2002, the 
Airport Commission awarded Lease A to Wells Fargo 
Bank, N.A., as the highest responsive and qualified 
bidder, with a MAG of $282,000 for the first year of the 
lease. Under the proposed lease, Well Fargo Bank would 
operate ten ATMs, each one at a different location 
throughout the Airport's North and South Terminals and 
at the Airport's Rental Car Facility. 

1. According to Mr. Pfeiffer, the Airport sent Invitations 
to Bid for the subject lease to 304 firms. The Airport had 
required a minimum MAG bid amount of $180,000. The 
percentage rent and the transaction rent payable by the 
lessee were set by the Airport and were therefore the 
same for all bidders. According to Mr. Pfeiffer, seven 
potential bidders attended the Airport's pre-bid 
conference held on April 17, 2002. Subsequently, two 
firms submitted a bid: (a) Wells Fargo Bank with a MAG 
of $282,000 ($102,000 more than the Airport's required 
MAG of $180,000), and (b) Union Bank of California with 
a MAG of $250,000 ($70,000 more than the Airport's 
required MAG of $180,000). As previously noted, the 
MAG of $282,000 for the proposed lease is $77,766 or 
approximately 38.1 percent more than the MAG of 



2 This amount of $250 does not include the costs to Wells Fargo Bank of purchasing and 
installing the ATMs themselves. 

3 According to Mr. David Pfeiffer of the Airport, Domestic Terminals ATM Lease B is for five 
ATM locations at the Airport. The required MAG was at least $95,000. Domestic Terminals 
ATM Lease B was awarded to the Union Bank of California which bid a MAG of $120,000 per 
year for five years, with two one-year options. According to Ms. Adrienne Go of the City 
Attorney's Office, Domestic Terminals ATM Lease B does not require Board of Supervisors 
approval because the projected revenue generated by the contract is less than $1,000,000 
over the term of the contract. $1,000,000 in revenues is the threshold specified in Charter 
Section 9.118 for Board of Supervisors approval of revenue-generating contracts and leases. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

59 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



$204,234 for the last year of the Airport's existing lease 
with Wells Fargo Bank, which expires on February 15, 
2003. 

2. In November of 1999, voters approved Proposition F 
prohibiting financial institutions from imposing 
surcharges on ATM customers. According to Ms. 
Adrienne Go of the City Attorney's Office, the proposed 
lease provides that if and when Proposition F is deemed 
by a court of competent jurisdiction to be applicable to 
Wells Fargo Bank's operations at the Airport, Wells Fargo 
Bank would have the right to terminate the lease. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

60 



Attachment 



EXHIBIT A 
PREMISES 



Approximately ten (10) ATM locations as indicated on the attached drawings. 

1 . Terminal 3, 2 nd Level, across from Gates 70-71 (1) 

2. Terminal 3, 1 st Lev., Am. Airlines baggage claim, behind escalator (1) 

3. Terminal Ex, United Airlines Express Terminal (1) 

4. Terminal 1, 2 nd Level, B/A C near Gate 42 (1) 

5. Terminal 1, 1 st Level, behind Carousel 7 (1) 

6. Terminal 3, 2 nd Level, B/A F before Gate 84 (1) 

7. Terminal 3, 1 st Level, near carousel 3 (1) 

8. Rental Car Facility (1) 

9. Terminal 1, 2 nd Level, B/A C, Pre-Security (1) 

1 0. Terminal 1 , 2 nd Level, B/A B across from Gate 22(1) 



Exhibit A - Page 1 
61 
Lease for Domesric ATMs X:\CDM\CONCESS OPPUTM Domestic 2002\ATMLeasetinalA.DOC 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



Item 10 -File 02-1403 

Department: 

Item: 



Services to be 
Performed: 

Description: 



Airport 

Resolution concurring with the Controller's certification 
that Airport Information Booth Services at San Francisco 
International Airport can continue to be practically 
performed by a private contractor at a lower cost than if 
work were performed by City and County employees. 



Airport Information Booth Services 

The Airport Information Booth Services Program, which 
is operated daily from 8 a.m. to 12 midnight, was 
established by the Airport in 1990 to provide centralized 
locations for the purpose of (a) providing information to 
air passengers regarding Airport facilities and services, 
available ground transportation services, regional hotel 
accommodations, and visitor services and events, and (b) 
selling transit passes for regional public transportation 
systems to employees and Muni passports to visitors. 
Currently, the Airport has a total of six information 
booths on the Arrival Levels in three of the four terminals 
at the Airport. There are two booths in the North 
Terminal, two booths in the South Terminal, and two 
booths in the new International Terminal. According to 
Ms. Alice Sgourakis of the Airport, the old International 
Terminal (currently the Central Terminal) previously 
housed one information booth, but that booth was closed 
in the Fall of 2000 so that the Central Terminal could be 
renovated. Ms. Sgourakis advises that after the 
renovation is complete in the Spring of 2003, the Airport 
will re-open the information booth in the Central 
Terminal. 

Polaris/TRG Joint Venture, a private contractor, has 
provided information booth services to the Airport since 
the establishment of the program in 1990. 

Charter Section 10.104 provides that the City may 
contract with private firms for services that can be 
practically performed for a lower cost than similar work 
by City and County employees. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



Comments: 



The Controller has determined that contracting for the 
Airport Information Booth Services for Fiscal Year 2002- 
2003 would result in estimated savings as follows: 



Citv-Operated Service Costs 
Salaries 
Fringe Benefits 
Total 

Contractual Services Cost* 

Estimated Savings 



Lowest Highest 

Salary Step Salary Step 

$905,600 $1,075,312 
245.646 270.092 



$1,151,246 $1,345,404 
(778.971) (780.680) 

$372,275 $564,724 



* According to Ms. Maria Taylor of the Controller's Office, 
the Contractual Services Cost includes (a) the current 
contractor's cost of $771,382, and (b) the salary and fringe 
benefits of a 0.10 FTE 1823 Senior Administrative 
Analyst position for contract monitoring, at the lowest 
salary step of $7,589, and highest salary step of $9,298. 
The current contractor's cost, $771,382, is made up of the 
cost of (i) $529,158 for contracted positions, (ii) $180,739 
for payroll taxes and fringe benefits, and (hi) $61,485 for 
overhead and profit. 

1. Mr. Duke Briscoe, Deputy Director of the Airport 
reports that Airport Information Booth Services were first 
certified as required under Charter Section 10.104 in 
Fiscal Year 1990-1991, and have been continuously 
provided by an outside contract since then. 

2. Ms. Ilze Rozenbergs of the Airport reports that the 
most recent Airport Information Booth Services contract 
with Polaris/TRG Joint Venture began on September 15, 
2001. The subject contract term is for one year, expiring 
September 14, 2002, with four annual renewals up to a 
maximum term of five years. According to Ms. 
Rozenbergs, the Airport selected Polaris/TRG Joint 
Venture in January of 2001 through a Request for 
Proposals process. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

63 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



3. Ms. Ada Lam of the Airport reports that the Airport 
intends to exercise its first option to renew the Airport's 
contract with Polaris/TRG Joint Venture for the one-year 
period of September 15, 2002 through September 14, 
2003. 

4. The estimated total contract cost used for the purpose 
of this analysis is the Controller's estimate of the cost to 
provide airport information booth services for Fiscal Year 
2002-2003 as described above. 

5. The Controller's supplemental questionnaire with the 
Department's responses is attached to this report. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

64 



Attachment 
CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

DEPARTMENT: SFIA Landside Operations 

CONTRACT SERVICES: Airport Information Booth Prog ram 
CONTRACT PERIOD: July 1, 2002 to June 30, 2003 

(1) Who performed the activity/service prior to contracting out? 

Polaris Research and Deveopment has performed these services since 
the Program's inception in 1990. 



(2) How many City employees were laid off as a result of contracting out? 

None (see #1) 

(3) Explain the disposition of employees if they were not laid off. 

N/A (see Item #1) 

(4) What percentage of City employees' time is spent of services to be contracted out? 

N/A (see Item #1) 

(5) How long have the services been contracted out? Is this likely to be a one-time or 
an ongoing request for contracting out? 

Services have been contracted out since the Program's inception on 
Oct. 15, 1990. This will be an ongoing request for contracting out. 

(6) What was the first fiscal year for a Proposition J certification? Has it been certified for each 
subsequent year? 

It was first certified in Fiscal Year 1990/91 and has been certified 
each subsequent year. 

(7) How will the services meet the goals of your MBE/WBE Action Plan? 

Both members of the Polar is-TRG Joint Venture' are minority owned companies. 
Under the first year of the Polaris-TRG contract, there was a 4% WBE/MBE action 
plan. Through April, 2002: 2X Coherent Group (WBE) : staff training; 1%. Stevens: 
office supplies; 5% The Robert Grp: Management support. Expect same in FY 02/03. 

(8) Does the proposed contractor provide health insurance for its employees? 

Polaris does offer a full benefits package to employees including health 
and disability coverage, life insurance, sick leave and vacation pay. The 
Contractor also provides a 401K retirement program for employees. 

(9) Does the proposed contractor provide benefits to employees with spouses? If so, are the same 
benefits provided to employees with domestic partners? If not, how does the proposed contractor 
comply with the Domestic Partners ordinance? 

Polaris provides benefits to employees with spouses and offers these 
benefits to domestic partners. 

(10) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 

Yes, Polaris-TRG complies with the stipulations of the Minimum 
Compensation Ordinance. 




Department Representative: 

Duke Briscoe, Deputy Airport Director, Operations 

Telephone Number: (650) 821-5010 



65 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



Item 11 -File 02-1410 

Department: 

Item: 



Grant Amount: 
Grant Period: 
Source of Funds: 
Required Match: 
Indirect Costs: 

Description: 



Airport 

Resolution authorizing the Airport Commission to accept 
and expend a funding increase of $493,000 from 
$1,202,500 to $1,695,500 from the Federal Aviation 
Administration ("FAA") for the San Francisco Police 
Department (SFPD) Airport Bureau K-9 Explosive 
Detection Team. 

$493,000 

October 1, 1998, to September 30, 1999 

Federal Aviation Administration (FAA) 

None 

Indirect costs have not been budgeted because they are 
not allowed by the granting agency. 

The proposed resolution would authorize the Airport to 
accept and expend a continuation of FAA grant funds in 
the amount of $493,000. The FAA has awarded the 
subject grant funds as reimbursement to the Airport for 
expenditures incurred for the Airport's K-9 Explosives 
Detection Team Program for Federal FY 1999-2000 in the 
amount of $252,500 and Federal FY 2000-2001 in the 
amount of $240,500, for a total grant amount of $493,000. 
According to Sgt. Dan Greeley of the Airport Bureau of 
the Police Department, the FAA grant funds will be used 
to partially reimburse the Airport for expenditures 
incurred for Airport dogs and dog handlers, including: dog 
handler salaries (pay differential), overtime, uniforms, 
dog food, veterinary care, kenneling, vehicles, vehicle 
maintenance, explosives travel and training and dog 
handler travel and training. The SFPD has eleven dogs 
for use in its Airport Bureau K-9 Explosives Detection 
Team Program. Sgt. Greeley advises that the minimum 
FAA reimbursement is $40,000 per year, per dog and 
related expenses, for up to six U.S. Transportation 
Security Administration certified dogs, for a minimum 
total reimbursement of $240,000 per year. The 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

66 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

reimbursements for Federal FY 1999-2000, in the amount 
of $252,500, and for Federal FY 2000-2001, in the amount 
of $240,500, are in excess of $40,000 per dog for six dogs 
based on the availability of FAA funds. 

In January and August of 1998, the Board of Supervisors 
approved the acceptance and expenditure of FAA grant 
funds of $708,000 (Resolution Nos. 22-98 and 708-98). The 
original grant funds were used as reimbursement to the 
Airport for expenditures incurred for the Airport's K-9 
Explosives Detection Team Program between March 23, 

1997 and September 30, 1998. In July of 1999, the Board 
of Supervisors approved the acceptance and expenditure 
of additional FAA grant funds of $494,500 (File 99-1303). 
The additional grant funds were used as reimbursement 
to the Airport for the expenditures incurred for the K-9 
Explosives Detection Team Program between October 1, 

1998 and September 30, 1999. Therefore, total FAA grant 
funds for the Airport's K-9 Explosives Detection Team 
Program expenditures from March 23, 1997 to September 
30, 1999 were in the amount of $1,202,500. The proposed 
resolution would increase total FAA funding for the 
Airport's K-9 Explosives Detection Team Program since 
October 1, 1999, by the subject grant amount of $493,000, 
from $1,202,500 to $1,695,500. 

Budget: Attachment I, provided by the Airport, contains budget 

details for the $493,000 in FAA grant reimbursement 
funds, including $252,500 for Federal FY 1999-2000 
(October 1, 1999 to September 30, 2000) and $240,500 for 
Federal FY 2000-2001 (October 1, 2000 to September 30, 
2001). 

Comments: 1. The K-9 Explosives Detection Team, which was 

established in FY 1985-1986, includes eleven Airport 
Police officers, and eleven dogs. The Team responds to 
bomb threats, unattended bags, and other threats. The 
Team also searches aircraft as well as vehicles entering 
San Francisco International Airport. According to Sgt. 
Greeley, the Team also responds to other Bay Area 
jurisdictions, on an as-requested and as-available basis as 
part of the Multi-county Mutual Aid Response Program 
under which various law enforcement agencies provide 
assistance to one another. The San Francisco Police 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

67 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

Department is a member of the nine Bay Area County's 
Multi-county Mutual Aid Response Program. 

2. Ms. Martha Peterson of the Airport advises that the 
Airport's K-9 Explosives Detection Team submits invoices 
to the FAA, which, as previously noted, reimburses the 
Airport for at least $40,000 per dog and related expenses 
for up to six dogs, on an annual basis. 

3. Although the Budget Analyst believes that the FAA 
grant funds should be accepted, the Department has been 
unable to provide the Budget Analyst with all of the 
requested information pertaining to the K-9 Explosives 
Detection Team Program, including the total amount of 
expenditures incurred by the Airport's K-9 Explosives 
Detection Team and the total amount of FAA 
reimbursements since the inception of this Program. 
Further, the Department was unable to provide an 
explanation to the Budget Analyst as to why the Airport 
is just now requesting acceptance and expenditures of 
FAA funding reimbursement for expenditures incurred 
from October of 1999 through September of 2001. 

4. Capt. Mario Gonzalez of the SFPD advises that the 
Police Department will present additional information 
directly to the Finance Committee at its meeting of 
August 21, 2002. 

5. Attachment II to this report is the Department's Grant 
Information Form, including the Disability Access 
Checklist. 

Recommendation: Approve the proposed resolution contingent on the 

Finance Committee being satisfied with the additional 
information to be provided by the Police Department 
directly to the Committee. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

68 



FEDERAL 1999/2000 

PORPOSED BUDGET FOR THE FAA 

REIMBURSEMENT GRANT OF $252,500 



Attachment l 
Page 1 of 2 



Qty Description 




Unit Cost Total 


Federal FY 1999-2000 FAA Grant of S252.500 




$800.00 


$9,600.00 


12 Monthly K-9 Food 


12 Monthly Vet Care 




$935.00 


$11,220.00 


12 Monthly Kenneling 




$375.00 


$4,500.00 


12 Monthly Vehicle Maintenance and Repairs 




$1,250.00 


$15,000.00 


1 Conference Travel and Per Deim 




$2,500.00 


$2,500.00 


Canine Pay Diffemetiqal 




$1,900.00 


$11,700.00 


Programmatic overtime p. 






$64,790.00 


Internet Access (12 Months) 






$230.00 


Communication Media 






$500.00 




Subtotal 




$120,040.00 


Program Enhancements 




$1,800.00 


$10,800.00 


6 Replacement Tires and Wheels (Tahoes) 


2 Emergency Light Bar And Equipment 




$4,230.00 


$8,460.00 


4 Panasonic In-Vehicle Laptop Computer 




$6,000.00 


$24,000.00 


4 Laptop Computer Software 




$3,000.00 


$12,000.00 


4 Laptop Computer Mountings, etc 




$1,300.00 


$5,200.00 


4 Explosive Detection Canines 




$10,000.00 


$40,000,00 


10 800 MHZ Portable Radios 




$3,200.00 


$32,000.00 




Subtotal 




$132,460.00 




Total 




$252.500.00| 



69 



FEDERAL 2000/2001 

PROPOSED BUDGET FOR THE FAA 

REIMBURSEMENT GRANT OF $240,500 



Attachment I 
Page 2 of 2 



Qty Description 




Unit Cost Total 


Federal FY 2000-2001 FAA Grant of S240.500 




• $800.00 


$9,600.00 


12 Monthly K-9 Food 


12 Monthly Vet Care 




$935.00 


$11,220.00 


12 Monthly Kenneling 




$375.00 


$4,500.00 


12 Monthly Vehicle Maintenance and Repairs 




$1,250.00 


$15,000.00 


1 Conference Travel and Per Deim 




$2,500.00 


$2,500.00 


Canine Pay Differential 




$1,900.00 


$11,700.00 


Programmatic overtime 






$64,790.00 


Internet Access (12 Months) 






$230.00 


Communication Media 






$500.00 




Subtotal 




$120,040.00 


Program Enhancements 




$1,000.00 


$4,000.00 


4 Kennels 


4 Emergency Lighting kits 






$8,460.00 


4 Panasonic In-Vehicle Laptop Computer 




$6,000.00 


324,000.00 


4 Laptop Computer Software 




$3,000.00 


$12,000.00 


4 Laptop Computer Mountings, etc 




$1,300.00 


$5,200.00 


4 Explosive Detection Canines,.. 




$10,000.00 


$40,000.00 


Outside Training 






$17,600.00 


4 K-9 Vehicle Enclosures and temperature control 




$2,300.00 


$9,200.00 




Subtotal 




$120,460.00 




Total 




$240,500.00| 



70 



Attachment II 

File Number: Page 1 of 2 

(Provided by Clerk of Board of Supervisors) 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: K-9 Explosives and Detection Team Program 

2. Department: Airport Commission SFPD - Airport Bureau 

3. Contact Person: George Duran Telephone: (650) 821-2920 

4. Grant Approval Status (check one): 

[x] Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $ 

6a. Matching Funds Required: None 
b. Source(s) of matching funds (if applicable): 

7a. Grant Source Agency: Federal Administration Agency ("FAA") 
b. Grant Pass-Through Agency (if applicable): 

8. Proposed Grant Project Summary: The FAA will provide partial funding assistance for up to six (6) 
FAA certified Airport canines and unit handlers for salaries, overtime, uniforms (laundry), K-9 food, K-9 
veterinary (medications), K-9 kenneling, vehicles, vehicle care and maintenance, handler training/travel 
and explosive training/travel. 



9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: October 1, 1999 End-Date: September 30, 2001 . 

10. Number of new positions created and funded: None 

1 1 . If new positions are created, explain the disposition of employees once the grant ends? 
12a. Amount budgeted for contractual services: None 

b. Will contractual services be put out to bid? 

c. If so, will contract services help to further the goals of the department's MBE/WBE 
requirements? 



71 



all acumen l 11 
Page 2 of 2 
d. Is this likely to be a one-time or ongoing request for contracting out? 

13a. Does the budget include indirect costs? []Yes [X] No 

bl If yes, how much? $ 

b2. How was the amount calculated? 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [ ] To maximize use of grant funds on direct services 

[ ] Other (please explain): 

14. Any other significant grant requirements or comments: None 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[x] Existing Site(s) [x] Existing Structure(s) [x] Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

[ ] New Site(s) [ ] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal and 
concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and all 
other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer: 
Date Reviewed: <J v U/\ ^ ^ — 





Department Approval 




/gnature) 



, (Title) 

Jul 



\0LkjJu (JHJJM 




72 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

Items 12, 13 and 14 - Files 02-1404. 02-1405 and 02-1406 

The proposed ordinances would establish the Fiscal Year 2002-2003 Property 
Tax rates for the City and County of San Francisco including the Bay Area Air 
Quality Management District and the Bay Area Rapid Transit District (File 02- 
1404), for the San Francisco Community College District (File 02-1405), and for the 
San Francisco Unified School District (File 02-1406). The Property Tax rate 
proposed for the City and County of San Francisco is $1.1170 for each $100 of 
assessed value, which is the maximum allowable rate. The total Property Tax rate 
of $1.1170 per $100 of assessed value for Fiscal Year 2002-2003 for all of the 
jurisdictions named above, as calculated by the Controller, includes bond interest 
and redemption charges. The proposed Fiscal Year 2002-2003 Property Tax rate of 
$1.1170 is a decrease of $0,007 from the Fiscal Year 2001-2002 Tax rate of $1.1240. 

The Fiscal Year 2001-2002 approved Property Tax rates and the Fiscal Year 
2002-2003 proposed Property Tax rates are as follows: 



Approved 

Fiscal Year 

2001-2002 

Rates 



Proposed 

Fiscal Year 

2002-2003 

Rates 



Increase 
(Decrease) 



Citv and County of San Francisco: 



General Fund 


0.57239620 


0.57239620 




Children's Fund 


0.03000000 


0.03000000 


- 


Open Space Acquisition Fund 


0.02500000 


0.02500000 


- 


County Superint. of Schools 


0.00097335 


0.00097335 


- 


Library Preservation Fund 


0.02500000 


0.02500000 


- 


S.F. Unified School District 


0.28485725 


0.28485725 


- 


S.F. Community College 
District 


0.05336253 


0.05336253 


- 


Bay Area Air Quality 
Management District 


0.00208539 


0.00208539 


- 


Bay Area Rapid Transit 
District 


0.00632528 


0.00632528 


— '- 






Subtotal, General Fund Tax 
Rate 


$1.00 


$1.00 


$0.00 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

73 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 



Property Tax Rates (Continued) 

Approved Proposed 

Fiscal Year Fiscal Year 

2001-2002 2002-2003 

Rates Rates 



Rates for Bonded Indebtedness 

City and County of San $ 

Francisco 0.12359506 

S. F. Unified School District 0.00040494 

Subtotal, Bonded Indebtedness $ 0.124 



0.11671113 
0.00028887 
$0,117 



Increase 
(Decrease) 



$ ($ 0.00688) 



(0.00012) 
($ 0.007) 



Total Combined Tax Rate $ 1.124 



$ 1.117 



($ 0.007) 



Compared with the Fiscal Year 2001-2002 Property Tax rate of $1,124, the 
Fiscal Year 2002-2003 proposed $1,117 Property Tax rate will have the following 
effect on a tax bill for a single family residence assessed at $400,000 in FY 2001- 
2002: 



Fiscal Year 
2001-2002 

Assessed Value $400,000 

Less Homeowners Exemption 7.000 

Total $393,000 divided by $100 x $1.1240 



1,417.32 



Fiscal Year 
2002-2003 

Assessed Value (2000-2001) $400,000 
Add 2% Inflationary Rate 8.000 

Subtotal $408,000 

Less Homeowners Exemption 7.000 

Total $401,000 divided bv $100 x $1.117 = $4.479.17 



Net increase in Property Tax Bill for Fiscal Year 2002-2003 



$61.85 



As shown above, homeowners of a single family residence, assessed at $400,000, 
would experience an inflationary rate increase of 2 percent to the assessed value of 
the residence, as allowed under Proposition 13 for Fiscal Year 2002-2003. In the 
example reflected above, the inflationary rate increase, combined with the 
decreased rate for bonded indebtedness, results in a Property Tax increase of 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

74 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

$61.85, or a 1.4% increase, for Fiscal Year 2002-2003 as compared to Fiscal Year 
2001-2002. 

Section 37.3 (6) of the Administrative Code (the Residential Rent 
Stabilization and Arbitration Ordinance) allows landlords to pass through to 
tenants that portion of Property Taxes attributable to the City's General Obligation 
bonds approved by voters between November 1, 1996 and November 30, 1998. For 
Fiscal Year 2002-2003, the passthrough rate, as determined by the Controller, is 
$0,025 per $100 of assessed value, or 2.5 cents per $100 of assessed value. The 
passthrough rate in FY 2001-2002 was $0,025, which is the same as the proposed 
passthrough rate of $0,025 in FY 2001-2002. Landlords must comply with the Rent 
Board's procedures to be eligible for passthrough provisions. 

Recommendation 

Approve the proposed ordinances. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

75 



Memo to Finance Committee 

August 21, 2002 Finance Committee Meeting 

Item 15 - File 02 - 1407 

The proposed ordinance would amend the previously approved Fiscal 
Year 2002-2003 Annual Appropriation Ordinance (AAO) as a prerequisite to 
the levy of the Property Tax rate. The proposed ordinance would amend the 
Fiscal Year 2002-2003 AAO to decrease previously appropriated funds in the 
amount of $31,964 (from $1,211,979 to $1,180,015) to the Art Commission for 
the Municipal Symphony Orchestra (one-eighth of one cent per $100 of 
assessed valuation) as required by Charter Section 16.106(1). 

Comment 

The Fiscal Year 2002-2003 budget presently includes $1,211,979 for 
the Art Commission expenditures for the Municipal Symphony Orchestra. 
The proposed ordinance would decrease this appropriation by $31,964 to 
$1,180,015 for Fiscal Year 2002-2003 in accordance with the Controller's 
final calculations. 

Recommendation 

Approve the proposed ordinance. 




cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

76 



F 



BOARD of SUPERVISORS 




City Hall 

Dr. Carlton B. Goodlett Place, Room 244 

San Francisco 94102-4689 

Tel. No. 554-5184 

Fax No. 554-5163 

TDD/TTY No. 544-5227 



Notice of Cancelled Committee Meetings 
OF THE BOARD OF SUPERVISORS 



NOTICE IS HEREBY GIVEN that the regularly scheduled Committee Meetings of 
the San Francisco Board of Supervisors for August 27, 2002 through September 16, 
2002 are cancelled. 




Toria L You 
Clerk of the Board 




DOCUMENTS DEPT. 
AUG 2 8 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



' 







3F 
bo. 75 

A?<w \m^*\ Cit - 

7/g/oi R( &s£Sj&\y\ Dr. Carlton B. Goodlett lace. Room 244 

' / I BOARD of SUPERVISORS a ^MT?/3lM z SanFranci' 1-4689 

Tel. No 
'f/ Fax No. 554- J3 

TDD/TTYNo. :' '-'-5227 



JNIOTICE OF CANCELLED MEETING 

FINANCE COMMITTEE 

SAN FRANCISCO BPARD OF SUPERVISORS 

NOTICE IS HEREBY GIVEN that the meeting of the Finance Comrrr 1 se " ;heduled for 
Wednesday, September 18, 2002, at 12:30 p.m., at 1 Dr. Carlton B. Goc llett Place, 
Room 263, City Hall, San Francisco, California, has been cancelled. 



Gloria L. Young, Clerk of the Boarc 



D0( -DEPT. 

SEi> ' 6 2002 



LIBRARY 



Cancelled Meeting Notice/Ad 2/1/01 




City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 
Clerk: Gail Johnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, September 25, 2002 



12:30 PM 
Regular Meeting 



City Hall, Room 263 



Members Present: Aaron Peskin, Chris Daly, Sophie Maxwell. 



MEETING CONVENED 



The meeting convened at 12:38 p.m. 
020576 [Proposition F, Citizens' General Obligation Bond Oversight Committee] 
Supervisor Leno 

Hearing to discuss the implementation of Proposition F, the Citizens' General Obligation Bond Oversight 

Committee ballot measure, approved by voters in March of 2002. 

4/8/02, RECEIVED AND ASSIGNED to Rules and Audits Committee. 

9/12/02, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Supervisor Leno; Jodi Darby, Controller's Office, City Property Division; 

Karen Ribble, Mayor's Office of Public Finance; Michael Martin, Deputy City Attorney; Arlene Singer; Gloria 

Young, Clerk of the Board; Stan Warren, San Francisco Building Trades Council; Nathan Nayman, 

Committee on Jobs; Arthur Chang, Neighborhood Parks Council. 

FILED by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 



Printed at 11:42 11/ on .1 ! 114 



Finance Committee Meeting Minutes September 25, 2002 



021221 [Laws and procedures governing the enforcement of prevailing wages for workers on public work 
projects] 
Supervisors Ammiano, Daly, Peskin, Maxwell 

Ordinance amending Administrative Code by adding subsection 6.1(H), definition of prevailing wage; 
amending subsection 6.22(A)(6) to include a requirement concerning subcontractor licenses; amending 
subsection 6.22(B) to include a requirement that all contractor and subcontractors provide workers' 
compensation insurance certificates; amending subsection 6.22(E) concerning application and enforcement of 
prevailing wage requirements and assessment of penalties and backwages; amending subsection 6.22(0) to add 
further contractual requirements for the employment of apprentices and to add penalties for noncompliance; 
adding subsection 6.22(P) concerning safety requirements for contractors and subcontractors; amending section 
6.24 to expand the authority of the Office of Labor Standards Enforcement to enforce requirements of state and 
federal law, to enforce working conditions and apprenticeship and to assess monetary penalties and backwages 
against public work contractors. 

7/8/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 8/7/2002. (9/13/02 - Referred to Small Business 
Commission for comment and recommendation.) 

Heard in Committee. Speakers: Supervisor Ammiano; Cheryl Bregman, Deputy City Attorney; Harvey Rose, 
Budget Analyst; Judith Blackwell, Director, Office of Contract Administration; Donna Levitt, Labor Standards 
Enforcement Officer, Office of Labor Standards Enforcement; Office of Contract Administration; Cathy 
Widener, Airport; Stan Warren, Building Trades Council; Rudy Calderon, President, Laborers Asbestos, 
Local 67; Theodore Lakey, Deputy City Attorney. 
Supervisors Daly, Peskin and Maxwell added as co-sponsors. 
AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Ordinance amending the Administrative Code by adding subsection 6.1(H), definition of prevailing wage; 
amending subsection 6.22(A)(6) to include a requirement concerning subcontractor licenses; amending 
subsection 6.22(B) to include a requirement that all contractor and subcontractors provide workers' 
compensation insurance certificates; amending subsection 6.22(E) concerning application and enforcement of 
prevailing wage requirements and assessment of penalties and backwages; amending subsection 6.22(0) to add 
further contractual requirements for the employment of apprentices and to add penalties for noncompliance; 
adding subsection 6.22(P) concerning safety requirements for contractors and subcontractors; amending section 
6.24 to expand the authority of the Office of Labor Standards Enforcement to enforce requirements of state and 
federal law, to enforce working conditions and apprenticeship and to assess monetary penalties and backwages 
against public work contractors. 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021310 [PUC contract with Primus Infrastructure and Jacobs Civil Inc. for program management services.] 
Supervisor Peskin 

Hearing regarding the Public Utilities Commission's progress toward implementing its contract with Primus 
• Infrastructure and Jacobs Civil Inc. for program management services. 
7/22/02, RECEIVED AND ASSIGNED to Finance Committee. 
Speakers: None. 
Continued to 10/9/02. 
CONTINUED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 2 Printed at 11:43 AM on 3/3/04 



Finance Committee 



Meeting Minutes 



September 25, 2002 



021470 [Contracting Out Budget Analyst Services] 

Resolution concurring with the Controller's certification that Budget Analyst services can be practically 
performed by a private contractor for lower cost than similar work services performed by City and County 
employees. (Clerk of the Board) 
8/19/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Monique Zmuda, Deputy Controller; Gloria Young, Clerk of the Board; John 
Bardis. 

RECOMMENDED., by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021315 [Contracting out Janitorial Services] 

Resolution concurring with the Controller's Certification that janitorial services can be practically performed at 
the Asian Art Museum under private contract at a lesser cost than similar work performed by employees of the 
City and County. (Asian Arts Commission) 
7/29/02, RECEIVED AND ASSIGNED to Finance Committee. 

8/21/02, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Dr. Emily Sano, Director, Asian Art Museum; 
Monique Zmuda, Deputy Controller; Linus Black; Rebecca Miller, SEIU, Local 790; Andre Spearmon, SEIU, Local 790; Ben Rosenfield, 
Mayor's Budget Office. 
Continued to 9/25/02. 

Speakers: None. 
Continued to 10/2/02. 
CONTINUED by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Absent: 1 - Daly 



021324 [Airport Concession Lease] 

Resolution approving the Domestic Terminals Automated Teller Machine Lease A between Wells Fargo Bank, 
N.A. and the City and County of San Francisco, acting by and through its Airport Commission. (Airport 
Commission) 

(Public Benefit Recipient.) 

8/7/02, RECEIVED AND ASSIGNED to Finance Committee. 

8/21/02, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cathy Widener, Governmental Affairs 

Administrator, Airport; Theodore Lakey, Deputy City Attorney; Andre Spearmon, SEIU. Local 790. 

Continued to 9/25/02. 

Speakers: None. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Absent: 1 - Daly 



City and County of San Francisco 



Printed at tt:43 IW on J 3 l>4 



Finance Committee Meeting Minutes September 25, 2002 



021291 (Accept-Expend Federal Grant] 

Resolution authorizing the Airport Commission to accept and expend a Federal Airport Improvement Program 
grant in the amount of $5,291,558.00 from the U.S. Department of Transportation Federal Aviation 
Administration, and approving Modification Nos. 4 and 5 to Contract No. 4240.1 for preparation of 
environmental impact studies for the proposed runway reconfiguration project, for a total contract amount not 
to exceed $19,741,558. (Airport Commission) 

(Public Benefit Recipient.) 

7/24/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Stuart Sunshine, Airport; Eileen Bogan, 
SPEAK; Amy Quark, Alliance for a Clean Waterfront. 
Continued to 10/2/02. 
CONTINUED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021419 [MOU - San Francisco Police Officers' Association] 
Mayor, Supervisor Newsom 

Ordinance adopting and implementing Amendment No. 1 to the 2001-2003 Collective Bargaining Agreement 
between the San Francisco Police Officers' Association (SFPOA) and the City and County of San Francisco by 
amending Sections 1 3 (A) and (F) to incorporate the parties' agreement to clarify their intent with regard to 
compensation for canine officers and to correct clerical errors. (Mayor) 

8/12/02, RECEIVED AND ASSIGNED to Finance Committee. (9/25/02 - Revised Amendment No. 1 to 2001-2003 Collective 
Bargaining Agreement between SFPOA and City submitted by Department.) 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Theodore Lakey, Deputy City Attorney. 
RECOMMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021544 |Reserved Funds, Fire Department] 

Hearing to consider release of reserved funds, Fire Department (Ordinance No. 127-96, 1986 Fire Protection 
Bond interest earnings), in the amount of $2,071,417, to install the motorized gate valves essential to control 
the flows and pressures and preserve the integrity of the AWSS system in the event of a main failure. (Fire 
Department) 

8/22/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Paul Jones, Assistant Chief, Fire Department. 
Release of reserved funds in the amount of $32,417 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 4 Printed at 11:43 AM on 3/3/04 



Finance Committee 



Meeting Minutes 



September 25, 2002 



021314 [Department of Consumer Assurance's schedule of fees for weighing and measuring devices] 
Supervisor Gonzalez 

Resolution approving a schedule of fees to be charged by the Department of Consumer Assurance for testing of 
weighing and measuring devices initiated by written request and for reinspecting, retesting and recertifying 
weighing and measuring devices found to be outside the tolerances or specifications set by the California 
Department of Food and Agriculture upon an initial inspection prescribed by California Business and 
Professions Code Section 12210(a), and ratifying any such fees charged by the Department prior to this 
resolution. 

7/30/02, RECEIVED AND ASSIGNED to Finance Committee. (9/13/02 - Referred to Small Business Commission for comment and 
recommendation.) 

Heard in Committee. Speakers: Harvey Rose. Budget Analyst; Sid Baker, Department of Consumer 

Assurance. 

RECOMMENDED by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 



021284 [Extension of Agreement with PRWT Services, Inc.] 

Resolution authorizing a two-year extension of the agreement between PRWT Services, Inc. ajid the City and 
County of San Francisco. (Parking and Traffic Department) 

(Fiscal impact.) 

7/22/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the 

August 14, 2002 meeting. 

Heard in Committee. Speakers: Har\>ey Rose, Budget Analyst; Fred Hamdun, Executive Director, 
Department of Parking and Traffic. 

Amended on page 1, lines 16, 20, and 24, by replacing "Second" with "Third." 
AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021283 [Certification of Lower Cost Services] 

Resolution concurring with the Controller's certification that proposed services to be provided by PRWT 
Services, Inc. can be performed at a lower cost than similar services performed by City and County employees. 
(Parking and Traffic Department) 

(Fiscal impact; Companion measure to File 021284.) 

7/22/02, RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the 
August 14, 2002 meeting. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Fred Hamdun, Executive Director, 
Department of Parking and Traffic. 
RECOMMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 



Printed at ll:4> IV on I 3 M 



Finance Committee Meeting Minutes September 25, 2002 



020782 [Planning Code Amendment - South of Market SUD Amendments] 
Supervisor Daly 

Ordinance amending Planning Code Sections 803.5 and 822 to include union halls as permitted principal uses 

in the South of Market Special Hall of Justice Legal Services District, to include Assessor's Block 3780 Lots 1 

and 2 as part of the South of Market Special Hall of Justice Legal Services District, and to correct citations and 

zoning map page number references; amending Zoning Map Sheet 8SU of the City and County of San 

Francisco to include Lots 1 and 2 in Assessor's Block 3870 as part of the South of Market Special Hall of 

Justice Legal Services District; and making findings of consistency with the priority policies of Planning Code 

Section 101.1 and the General Plan. 

5/13/02, ASSIGNED UNDER 30 DAY RULE to Transportation and Commerce Committee, expires on 6/12/2002. 5/24/02 - Transmitted 

to Planning Commission for public hearing and recommendation. 

8/9/02, TRANSFERRED to Finance Committee. 9/18/02 - From Planning Department, Mitigated Negative Declaration issued on 8/30/02. 

Speakers: None. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 



ADJOURNMENT 



The meeting adjourned at 3:12 p.m. 



City and County of San Francisco 6 Printed at 1 1:43 AM on 3/3/04 



j. IS 




»*/ 



-~ 



ITY AND COUNTY i W OF SAN FRANCIS 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



September 19, 2002 



TO: 'Finance Committee 

FROM: Budget Analyst 

SUBJECT: September 25, 2002 Finance Committee Meeting 

Item 2 - File 02-1221 



DOCUMENTS DEPT. 
SEP 2 4 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



Department: 



Item: 



Description: 



Office of Contract Administration (OCA) 
Office of Labor Standards Enforcement (OLSE) 

Ordinance amending the Administrative Code by adding 
subsection 6.1(H), definition of prevailing wage; amending 
subsection 6.22(A)(6) to include a requirement concerning 
subcontractor licenses; amending subsection 6.22(B) to 
include a requirement that all contractor and 
subcontractors provide workers' compensation insurance 
certificates; amending subsection 6.22(E) concerning 
application and enforcement of prevailing wage 
requirements and assessment of penalties and backwages; 
amending subsection 6.22(0) to add further contractual 
requirements for the employment of apprentices and to 
add penalties for noncompliance; adding subsection 
6.22(P) concerning safety requirements for contractors 
and subcontractors; amending section 6.24 to expand the 
authority of the Office of Labor Standards Enforcement, 
within the Office of Contract Administration, to enforce 
requirements of State and Federal law, to enforce working 
conditions and apprenticeship and to assess monetary 
penalties and backwages against private firms holding 
public works contracts with the City. 

The proposed ordinance would amend the San Fran* 
Administrative Code to clarify the City's responsibilities 
pertaining to the enforcement of the payment of 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



prevailing wage rates, and to provide consistency with the 
San Francisco Charter and with State law. The ordinance 
would also expand the authority of the Office of Labor 
Standards Enforcement within the Office of Contract 
Administration (OLSE). Ms. Donna Levitt, the Labor 
Standards Enforcement Officer for the Office of Contract 
Administration, reports that the proposed ordinance is 
intended to improve the ability of the City and County of 
San Francisco to enforce the requirement that employees 
of prime contractors and subcontractors, which have been 
awarded public works or improvement contracts by the 
City, are paid the prevailing rate of wage. The proposed 
ordinance adds to Chapter 6 of the Administrative Code a 
definition for "prevailing wage" and "prevailing rate of 
wage," which is as follows: "the prevailing wage, as used 
in this Chapter, is the highest general prevailing rate of 
wage plus "per diem wages 1 " and wages paid for overtime 
and holiday work paid in private employment in the City 
and County of San Francisco for the various crafts and 
kinds of labor employed in the performance of any public 
work or improvement under this Chapter." Currently, 
Chapter 6 of the Administrative Code does not define 
either "prevailing wage" or "prevailing rate of wage." 

The proposed ordinance would also amend the 
Administrative Code by adding the requirement that all 
subcontractors, which bid on City public works contracts, 
be licensed for the type of work on the specific project at 
the time the firms submit their bids for a City contract. 
This is a clarification consistent with State law. In 
addition, the proposed ordinance would require that all 
contractors and subcontractors provide proof of workers 
compensation insurance. Ms. Levitt states that currently 
all contractors and subcontractors are required to have 
workers compensation insurance, but the Administrative 
Code currently only requires that prime contractors, and 
not subcontractors, provide proof of workers compensation 
insurance. Ms. Levitt advises that this new requirement 
is consistent with California Labor Code. Currently, any 
contractor or subcontractor that does not comply with 



1 Per diem wages, as defined in the California Labor Code are, "deemed to include employer payments for health 
and welfare, pension, vacation, travel, subsistence, and apprenticeship or other training programs authorized by 
Section 3093 so long as the cost of training is reasonably related to the amount of the contributions, and similar 
purposes." 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

2 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



paying prevailing wage rates is subject only to a penalty 
of $50 per day for each employee covered by the prevailing 
wage rate requirements, who is not paid prevailing wages. 
The proposed ordinance would amend the Administrative 
Code by adding a provision for the forfeiture of back 
wages in addition to any penalty amounts. Under the 
proposed ordinance, the amount of backwages owed to 
employees, as a result of failure to pay prevailing wage 
rates, will be witheld from City payments to contractors 
and subcontractors until such time that the contractors 
and subcontractors show proof that such backwages have 
been paid to their employees. 

However, Ms. Levitt advises that based on existing State 
law, the Office of Labor Standards Enforcement has been 
assessing contractors and subcontractors penalties and 
backwages since the Office began investigations of public 
works contracts in July of 2001. As reported in the 
attached memorandum, provided by Ms. Levitt, the Office 
has assessed $154,001 in penalties for non-compliance 
with the prevailing wage rates and an additional 
$272,137 in backwages owed to contractor and 
subcontractor employees since July of 2001 (see Comment 
No. 1). Such assessments result in the City witholding 
payments due to contractors and subcontractors under 
then applicable City contracts. Under the current 
provisions of the Administrative Code, it is the 
responsibility of the Department Head managing a public 
works project to withold the amount of any penalties 
when certifying to the Controller the amount of payment 
due by the City to contractors and subcontractors. 
Although there are no current provisions in the 
Administrative Code for the forfeiture (witholding) of 
backwages, the Administrative Code does contain 
provisions for the forfeiture (witholding) of penalties. 
Under the proposed ordinance, the Department Head 
would also be required to submit written notification to 
the Labor Standards Enforcement Officer of such 
penalties and the amount to be forfeited would also 
include backwages. As stated previously, backwages 
owed to contractor and subcontractor employees will be 
witheld by the City until such time that the contractors 
and subcontractors show proof that backwages pertaining 
to nonpayment of prevailing wages have been paid to the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



their empkyees. In the event that contractors and 
subcontractors do not pay their employees the backwages 
owed, the City would then directly pay the contractor and 
subcontractor employees the backwages from the monies 
witheld under the applicable City contracts. 

Under the proposed ordinance, the Controller would 
withold any forfeiture for penalties and backwages from 
the amount due from the applicable City contract for the 
work performed by the contractor or subcontractor until 
the contractor or subcontractor has agreed with the 
forfeiture or, in the event of an objection, until the matter 
is no longer subject to judicial review. The proposed 
ordinance provides that the Labor Standards 
Enforcement Officer make his/her best efforts to pay the 
backwages withheld to the individual workers identified 
as not having been paid the proper prevailing wage rate 
and that in the event that the individual workers cannot 
be located, the monies be held in escrow for two years. 
After two years, the monies for backwages would be 
dedicated to funding the City's enforcement costs 
pertaining to prevailing wage requirements. The proposed 
ordinance further provides that any penalties assessed 
that are in addition to backwages would be deposited to 
the City's General Fund. 

The proposed ordinance also adds an appeal procedure for 
contractors and subcontractors who disagree with a 
forfeiture of penalty amounts and/or backwages. Under 
the current Prevailing Wage Ordinance, there is no 
formal appeals process for contractors and subcontractors 
who disagree with a forfeiture of penalty amounts and/or 
backwages. The proposed ordinance would provide that if 
a contractor or subcontractor disagrees with a forfeiture, 
then within 15 working days of the date of receiving 
notification from the City, the contractor or subcontractor 
may request a hearing before the City Administrator. A 
hearing must then be held by the City Administrator or 
his or her designee within 45 days of the request, unless 
all parties agree to an extension. The proposed ordinance 
further provides that the determination of the City 
Administrator or designee is final and that the contractor 
or subcontractor can only appeal the determination of the 
City Administrator through a lawsuit for breach of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



contract. Ms. Sheryl Bregman of the City Attorney's 
Office advises that the contractors and subcontractors 
would have one year to take legal action (file a Notice of 
Government Claim) against the City if they disagree with 
the final determination of the City Administrator. 

In addition, the proposed ordinance would add a new 
penalty for failing to cooperate with the Office of Labor 
Standards Enforcement, in accordance with California 
Labor Code Section 1776(g). The proposed ordinance also 
updates the requirement for records to be maintained by 
contractors and subcontractors for the purpose of 
monitoring compliance with the prevailing wage 
requirements by stipulating that payrolls and basic 
records such as time cards, agreements, accounting 
ledgers, tax forms and logs be kept by the contractor and 
subcontractor for four years after a public work project is 
completed and be made available to the City at any time 
up to four years after the completion of the project. The 
proposed ordinance adds a penalty of $25 per calendar 
day for any contractor or subcontractor who fails to 
comply with the above provision. Under the proposed 
ordinance, the Labor Standards Enforcement Officer 
would request that the Controller withhold such penalties 
from payments due to the contractor or subcontractor. 

The proposed ordinance would also extend the scope of the 
prevailing wage requirements to City preconstruction 
trade work 2 and to City public works projects paid for 
with the equivalent of money under California Labor 
Code section 1720(b). According to Ms. Bregman, "the 
equivalent of money" refers to the transfer of assets other 
than money and can include bond premiums, credits or 
the transfer of assets at less than market value. This 
means that contractors and subcontractors who are 
compensated with assets other than money are subject to 
the prevailing wage requirements. 

The proposed ordinance would also: 

• Clarify and update the requirements for the 
determination of the amount of prevailing wage to be 



2 Preconstruction work is the work performed in preparation for a construction project including 

design work, permitting and site inspections. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

paid as determined by the Board of Supervisors by 
including "per diem wages" as defined by the 
California Labor Code; 

• Clarify and update the publication and availability of 
the Board of Supervisors determination to stipulate 
that City Departments make available to contractors 
and subcontractors a detailed statement of the 
prevailing rate of wages as determined by the Board of 
Supervisors; 

• Include a requirement that all construction contracts 
under Administrative Code Chapter 6 require 
compliance with the applicable California 
Occupational Safety and Health statutes and 
regulations; and 

• Clarify and update the scope of the authority of the 
OLSE to include working conditions and 
apprenticeship requirements in addition to prevailing 
wage. 

Comment: As stated previously, Ms. Levitt reports that the Office of 

Labor Standards Enforcement has assessed contractors 
and subcontractors $154,001 in penalties and an 
additional $272,137 in backwages since July of 2001, as a 
result of noncompliance in paying their employees 
prevailing wage rates. As reported in the Attachment, out 
of the amounts assessed, the OLSE has collected $39,362 
in penalties and an additional 885,147 for backwages as of 
the writing of this report. According to Ms. Levitt there 
was a delay in collecting penalties and backwages in the 
past because the OLSE did not have a system in place for 
collecting and distributing the monies. Ms. Levitt advises 
that in June of 2002, the OLSE created a Settlement and 
Release Letter which contractors or subcontractors are 
required to sign when they have agreed to the assessed 
penalties. As stated above, when contractors or 
subcontractors do not agree to assessed penalties and/or 
backwages or the final determination of the City 
Administrator, the contractors and subcontractors have 
one year to take legal action against the City. After one 
year, or if a determination is no longer subject to judicial 
review, the City will be able to distribute the monies 
witheld by the City from the applicable City contracts 
(forfeited monies). According to Ms. Levitt, in July of 
2002, the OLSE and the Controller's Office implemented a 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Citywide account into which penalties will be deposited 
when investigations are closed. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



City and County of San Francisco Office of Contract Administration 

Attachment Judith A. Blackwell, Director 

Willie Lewis Brown, Jr. Page 1 of 3 

Mayor Office of Labor Standards Enforcement 

Donna Levitt, Manager 



Memorandum 




To: Budget Analyst 

From: Donna Levitt 

Date: September 18, 2002 

Re: File 02-1221, Admin. Code Amendment- Chapter 6 



This memo addresses the information requested by Sarah Graham for the Budget 
Analyst regarding the proposed amendments to the Administrative Code. 

Backwaaes and Penalties Collected by OLSE 

The Office of Labor Standards Enforcement ("OLSE") has assessed approximately 
$272,000 in backwages and $154,000 in penalties against contractors for labor 
standards violations on public works projects. To date, backwages totaling $85,147 
have been paid to workers as a result of OLSE assessments. In addition, penalties in 
the amount of $39,362 have been collected and are now recoverable to the General 
Fund. 1 (see attached chart) 

The full amount of assessed backwages and penalties has not been collected because 
the judicial review process is not yet complete for some of the forfeitures. A contractor 
may have appealed an assessment and that appeal may be pending. If a contractor still 
disagrees with the final determination of OLSE and the contracting department after the 
appeal, the contractor has one year, from the date of the assessment, to take legal 
action (file a Notice of Government Claim). In those cases, the backwages and 
penalties are not available for collection until one year after the date of the assessment. 

The Settlement and Mutual Release letter is signed by the contractor when he/she 
agrees with the forfeiture assessed by OLSE and the contracting department. A signed 
Settlement and Release letter allows the City to distribute backwages and transfer 
penalty amounts from the contract to the penalty account set up by the Controllers 
Office. 



' "Recoverable" means that the contractor or subcontractor has agreed to the forfeiture and has signed either a Settlement and Mutual 
Release or a change order to forfeit the wage and/or penalty assessment. 

8 

City Hall, Room 430 1 Dr. Carlton B. Goodlett Place Tel. (415) 554-6235 Fax (415) 554-6291 San Francisco CA 94102-4685 



Attachment 
Page 2 of 3 



Proposed Appeal Process 

The Administrative Code currently contains no recourse or appeal process for 
contractors who disagree with assessments. The proposed ordinance contains the 
following process: 

1 . If a contractor of subcontractor disagrees with the forfeiture then they may 
request a hearing within 15 days. 

2. The City Administrator, or a designee, conducts a hearing and considers 
evidence provided by the contractor, subcontractor, contracting department, 
or the Office of Labor Standards Enforcement. 

3. The hearing shall occur within 45 days of the request, unless all parties agree 
to extend this time. 

4. The determination by the City Administrator is final 

5. Contractor may appeal by filing suit for breach of contract. 



Attachment 
Page 3 of 3 



OLSE Case Investigation Summary 
Sept. 18,2002 



Project 


Contractor 


Back 

Wages 

Assessed 


Penalties 
Assessed 


Back 

Wages 

Collected 


Penalties 
Collected 


New Zoo Education Center 


NuTek 


21,014 


21,600 








L&L 
Construction 


95,101 


36,000 






VR Electric 


31,423 


7,400 






Ellison Painting 


15,706 


16,000 


15,434 




Golden Pacific 


3,011 


3,250 






Kenney's Sash 
and Glass 


626 


300 






Pioneer 
Contractors 


3,327 


1,250 






Golden Gate Park Restrooms 


Alpha Bay 
Builders 


425 


450 


425 


450 


Clarendon Pump Station 


Mitchell 
Engineering 


11,721 


3,612 


11,721 


3,612 




Del Conte's 
Landscaping 


2,268 


4,800 


2,268 




Martin Luther King Jr. Pool 


CM. Chiang 
Construction 


7,242 


9,050 






College Hill Reservoir 


EG Construction 


4,000 


1,000 


4,000 


1,000 


Oak & Fell St.Traffic Signals 


King C Electric 


6,641 


4,350 








Heung Yeung 
Yu Const. 


3,328 


2,850 






Ulloa Street Curb Ramps 


King C. Electric 


1,958 


4,114 








Heung Yeung 
Yu Const. 


2,692 


2,100 






SF County Fair B!dg. Re-roof 


Bluewater 
Environmental 


20,660 


7,200 


20,660 


7,200 


SFGH Service Bldg. Bracing 


Lombardi 
Construction 


3,853 


4,150 


3,853 


4,150 


Waterfront Transportion 


Phoenix Electric 


15,689 


11,800 


15,689 


11,800 




Arrow Sign Co. 


996 


500 


996 


500 


Pine Street Traffic Signals 


Phoenix Electric 


6,654 


8,300 


6,654 


8,300 


Children's Zoo Barn 


L&L 
Construction 


6,844 


825 








VR Electric 


3,511 


750 






525 Golden Gate Ave. 


AMG 


3,447 


2,350 


3,447 


2,350 




Totals 


$272,137 


$154,001 


$85,147 


$39,362 



10 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Item 5 -File 02-1315 



Note: This item was continued from the August 21, 2002 Finance Committee 
Meeting. 



Department: 
Item: 



Services to be 
Performed: 

Description: 



Comments: 



Asian Art Museum 

Resolution concurring with the Controller's certification 
that janitorial services at the Asian Art Museum can be 
practically performed by a private contract at a lower cost 
than similar work services performed by City and County 
employees. 

Janitorial services at the Asian Art Museum 

Charter Section 10.104 provides that the City may 
contract with private firms for services that can be 
practically performed for a lower cost than similar work 
performed by City employees. 

The Controller has determined that contracting for 
janitorial services at the Asian Art Museum for FY 2002- 
03 would result in estimated savings as follows: 





Lowest 


Highest 




Salary 


Salary 


Citv-Operated Service Costs 


Step 


Step 


Salaries 


$441,559 


$522,290 


Fringe Benefits 


138,536 


151,227 


Equipment 


10.284 


10.284 


Total 


$590,379 


$683,801 


Contractual Services Cost* 


(372.527) 


(372.921) 


Estimated Savings 


$217,852 


$310,880 



* The Contractual Services Cost difference is due to the inclusion of 
City contract monitoring costs at the lowest and highest salary steps. 

1. The Asian Art Museum closed its operations at its 
Golden Gate Park facility on October 7, 2001 and will 
reopen at its new Civic Center facility in January of 2003. 
In the past, the M.H. de Young Museum and the Asian 
Art Museum used to be located in the same building in 
Golden Gate Park. Janitorial services for the shared 
portions of the Golden Gate Park facility, including the 
entry way and the restrooms, were provided by 2.0 FTE 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

11 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



2708 Custodian positions and funded in the Fine Arts 
Museum budget. Mr. Steve Dykes of the Fine Arts 
Museum reports that the 2.0 FTE 2708 Custodian 
positions that provided janitorial services for the shared 
portions of the Golden Gate Park facility continue to be 
included in the Fine Arts Museum budget. Mr. Dykes 
further reports that these two positions currently provide 
janitorial services at the Palace of the Legion of Honor. 

In addition to the 2.0 FTE 2708 Custodian positions 
included in the Fine Arts Museum budget, for the past 
nine years, the Asian Art Museum Foundation has paid 
approximately $55,000 per year for a janitorial services 
contract for the upkeep of the Asian Art Museum exhibit 
space and administrative offices at the Golden Gate Park 
facility, according to Ms. Ikuko Satoda of the Asian Art 
Museum. According to Ms. Satoda, the janitorial services 
contract for upkeep of Asian Art Museum space at the 
Golden Gate Park facility, paid for by the Asian Art 
Museum Foundation, was terminated when the Asian Art 
Museum closed its operations at its Golden Gate Park 
facility in October of 2001. In the attached memorandum 
(Attachment I), Ms. Satoda provides additional 
information on the provision of custodial services at the 
Asian Art Museum. 

Ms. Satoda advises that the janitorial services contract for 
upkeep of the Museum's new Civic Center facility is 
anticipated to begin on November 1, 2002. Therefore, the 
Fiscal Year 2002-03 Asian Art Museum budget includes 
funding of $247,000 for eight months of a janitorial 
services contract. 

2. The Contractual Services Cost used for the purpose of 
the analysis is based on (a) the Asian Art Museum's 
estimated FY 2002-03 costs to provide janitorial services 
for a full 12 months based on the associated workload at 
the new Civic Center facility and the industry standards 
for the cost of providing such janitorial services, and (b) 
the salary and fringe benefits at the lowest and highest 
salary steps of 0.25 FTE 7120 Buildings and Grounds 
Maintenance position at the Asian Art Museum to 
monitor the contract. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

12 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

3. According to Ms. Emily Sano of the Asian Art Museum, 
the Department would issue a Request for Proposals 
(RFP) for the Asian Art Museum's janitorial services 
contract immediately upon approval of the subject 
resolution. 

4. Attachment II, provided by the Asian Art Museum, 
is the Controller's supplemental questionnaire, with the 
responses from the Asian Art Museum. 

5. The Budget Analyst notes that a supplemental 
appropriation ordinance for $490,889 (File 02-1507), 
which is $117,968 or 31.6 percent more then the proposed 
contract amount of $372,921 included in the Controller's 
certification, and a companion Salary Ordinance (File 02- 
1529) to fund the creation of ten new in-house Civil 
Service custodian positions for the Asian Art Museum are 
currently pending in the Finance Committee. This 
$490,000 pending supplemental appropriation includes 
$247,000 to be reappropriated from the existing FY 2002- 
03 Asian Art Museum's budget for the subject janitorial 
services contract and $243,889 of additional General 
Fund monies. Therefore, the Budget Analyst recommends 
that the proposed resolution (File 02-1315), to approve the 
Controller's certification that janitorial services at the 
Asian Art Museum can be performed at a lower cost by a 
private contractor, should be continued in order to be 
heard by the Finance Committee at the same time as the 
pending supplemental appropriation and Salary 
Ordinance are heard. 

Recommendation: Continue the proposed resolution to the Call of the Chair, 

pending the scheduling of the supplemental appropriation 
(File 02-1507) and Salary Ordinance (File 02-1529) that 
would create and fund in-house custodian positions for 
the Asian Art Museum instead of contracting out for such 
services. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Attachment I 



Asian Art Museum of San Francisco 
Memorandum 



TO: Anna LaForte, Budget Analyst Office 

FROM: Ikuko Satoda, Asian Art Museum 

DATE: August 13, 2002 

Re: Custodial Services 



This memo is in response to your question regarding the City's responsibility in 
mamtairhng the City's new building. Asian Art Museum. 

For its entire existence the Asian Art Museum has relied on the promise of the City 
Charter (Sec. 16.1 06) to maintain the integrity of the Museum and its collections. For 
most of our history, the City contribution to security, custodial and building maintenance 
was part of the Fine Arts Museums' budget and to be performed by civil service 
employees. Nine years ago, due to the budget reduction and a dmini strative oversight, the 
funds for services provided to FAM by the City were significantly reduced, and one 
custodial position for the AAM was eliminated. In order to maintain the bunding at 
Golden Gate Park at an acceptable level, the Asian Art Foundation has been 
supplementing the custodial services by engaging outside janitorial sendees for several 
years. 

Since we are opening a newly renovated facility, which has been paid for largely with 
private funds as a gift to the City and County of San Francisco, we were assured 
continuing City support to resume the responsibility of mamtaining the City's brand new 
building by appropriating the costs of custodial services again to the Asian Ait Museum. 



14 



Attachment II 
CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

DEPARTMENT: Asian Art Museum 

CONTRACT SERVICES: .Janitorial Services 

CONTRACT FERIOD: One Year 



(1) Who performed tha activity/service prior to contracting out? 
N/A since the facility is brand new. 

(2) How many City employees were laid off as a result of contracting out? 
None 

(3) Explain the disposition of employees if they were net laid off. 
N/A 

(4) What percentage of City employees' time is spent of services to be contracted out? 
N/A 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contracting out? 

Never up to new. It will be ongoing request. 

(6) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent 
year? 

FY 02-03 will be the firs: year. 

(7) How will the services meet the goals or" your MBE/WBE Action Plan? 

Meet MBE requirement. 
(3) Does the proposed contractor provide health insurance for its employees? 
Assumed "yes" since the vendor is on the City approved list. 

(9) Does the proposed contractor provide benefits to employees with spouses? If so, are the same benefits 
provided to employees with domestic partners? If not, how does the proposed contractor comply with the 
Domestic Partners ordinance'' 

Assumed "yes" since the vendor is on the City approved list. 

(10) Does the proposed contractor pay meet the provisions of tne Minimum Compensation Ordinance? 

Assumed "yes" since the vendor is on the City approved list, 

Department Representative: Ikuko SatoCa 

Telephone Number: 415-557-6813 



15 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Item 6 - File 02-1324 

Note: This item was continued by the Finance Committee at its meeting of 
August 21, 2002. Ms. Cathy Widener of the Airport has requested that the 
item be continued to the call of the Chair pending further negotiations with 
Wells Fargo Bank, N.A. regarding the ability of Wells Fargo Bank to 
terminate the proposed lease (see Comment No. 2). 



Department: 
Item: 



Location: 



Purpose of Lease: 



Lessor: 



Lessee: 



Annual Rental 
Revenues Payable 
by Wells Fargo 
Bank to the Airport: 



Airport 

Resolution approving the Domestic Terminals Automated 
Teller Machine Lease A between Wells Fargo Bank, N.A. 
and the City and County of San Francisco, acting by and 
through its Airport Commission, for the operation of ten 
automatic teller machines (ATMs) at the Airport's North 
and South Terminals and the Airport's Rental Care 
Facility. 

The North and South Terminals and the Rental Car 
Facility, San Francisco International Airport 

The proposed new five year and SO day lease would 
provide space at ten locations throughout the Airport's 
North and South Terminals and the Airport's Rental Car 
Facility to Wells Fargo Bank, N.A. to operate one 
automated teller machine (ATM) at each of the ten 
different locations. These ten ATMs would operate 24 
hours per day, seven days a week at the locations listed in 
the Attachment provided by the Airport. 

City and County of San Francisco, acting by and through 
its Airport Commission. 

Wells Fargo Bank, N.A., a California corporation 

Minimum Annual Guarantee (MAG) of $282,000, to be 
adjusted annually by the percentage increase in the 
Consumer Price Index's "All Urban Consumers - Other 
Goods and Services" index and in accordance with 
enplanement data as specified in the proposed lease. In 
no event would the MAG be less than the prior year's 
amount. In addition to the MAG, Wells Fargo Bank 
would pay the Airport: 

• A percentage rent of 33 percent of any commission, 
surcharge, or other fee charged by Wells Fargo Bank 
to an ATM customer. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

16 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



• A transaction rent of $0.10 for each customer use of a 
Wells Fargo Bank ATM. 1 

• A promotional charge of $1.00 per square foot per year, 
if the Airport launches an Airport marketing and 
promotional campaign. 

According to Mr. David Pfeiffer of the Airport, under the 
existing lease between the Airport and Wells Fargo Bank, 
N.A., which began on February 16, 1998, Wells Fargo 
Bank will pay the Airport, for the last year of the lease, 
from February 16, 2002 to February 15, 2003, (a) the 
required MAG of $204,234, and (b) a percentage and 
transaction rent estimated at $114,038, for a total 
estimated payment bj T Wells Fargo Bank to the Airport of 
$318,272. 

As stated above, under the proposed lease, Wells Fargo 
Bank is required to the pay the Airport a MAG of 
$282,000 for the first year of the proposed lease. Mr. 
Pfeiffer advises that the Airport is unable to estimate the 
amount of the percentage and transaction rent for the 
first year of the proposed lease payable by Wells Fargo 
Bank to the Airport because of the current uncertain 
economic conditions. 



Term of Lease: 



Right of Renewal: 



The MAG of 5282,000 for the proposed lease to operate 
ten ATMs is $77,766 or approximately 38.1 percent more 
than the MAG of $204,234 for the last year of the existing 
lease to operate ten ATMs. 

The proposed lease would be for a term of five years and 
up to an additional 90 days for initial construction of 
required tenant improvements, commencing no earlier 
than February 16, 2003. 

The Airport would have sole discretion to grant two one- 
year extensions. 



Utilities and Janitor 
Provided by Lessor: 



Wells Fargo Bank would pay for the cost of all utilities 
and janitorial services. 



1 The transaction rent would not be payable with respect to (a) commissions, surcharges, or 
other fees on which percentage rent is payable, and (b) ATM customer transactions which are 
aborted. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

17 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



Tenant 
Improvements: 



Description: 



Comments: 



Wells Fargo Bank is required to spend at least $250 per 
ATM location to renovate its ten existing ATM locations 
within 90 days, for a total estimated cost of at least 
$2,500 2 . 

On May 7, 2002, the Airport Commission authorized 
Airport staff to accept competitive bids to operate a total 
of ten ATMs in the Airport's North and South Terminals 
and the Airport's Rental Car Facility (Domestic Terminals 
ATM Lease A 3 ). Subsequently, on July 9, 2002, the 
Airport Commission awarded Lease A to Wells Fargo 
Bank, N.A., as the highest responsive and qualified 
bidder, with a MAG of $282,000 for the first year of the 
lease. Under the proposed lease, Well Fargo Bank would 
operate ten ATMs, each one at a different location 
throughout the Airport's North and South Terminals and 
at the Airport's Rental Car Facility. 

1. According to Mr. Pfeiffer, the Airport sent Invitations 
to Bid for the subject lease to 304 firms. The Airport had 
required a minimum MAG bid amount of $180,000. The 
percentage rent and the transaction rent payable by the 
lessee were set by the Airport and were therefore the 
same for all bidders. According to Mr. Pfeiffer, seven 
potential bidders attended the Airport's pre-bid 
conference held on April 17, 2002. Subsequently, two 
firms submitted a bid: (a) Wells Fargo Bank with a MAG 
of $282,000 ($102,000 more than the Airport's required 
MAG of $180,000), and (b) Union Bank of California with 
a MAG of $250,000 ($70,000 more than the Airport's 
required MAG of $180,000). As previously noted, the 
MAG of $282,000 for the proposed lease is $77,766 or 
approximately 38.1 percent more than the MAG of 



2 This amount of $250 does not include the costs to Wells Fargo Bank of purchasing and installing 
the ATMs themselves. 

3 According to Mr. David Pfeiffer of the Airport, Domestic Terminals ATM Lease B is for five ATM 
locations at the Airport. The required MAG was at least $95,000. Domestic Terminals ATM Lease B 
was awarded to the Union Bank of California which bid a MAG of $120,000 per year for five years, 
with two one-year options. According to Ms. Adrienne Go of the City Attorney's Office, Domestic 
Terminals ATM Lease B does not require Board of Supervisors approval because the projected 
revenue generated by the contract is less than $1,000,000 over the term of the contract. $1,000,000 
in revenues is the threshold specified in Charter Section 9.118 for Board of Supervisors approval of 
revenue -generating contracts and leases. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

18 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

$204,234 for the last year of the Airport's existing lease 
with Wells Fargo Bank, which expires on February 15, 
2003. 

2. In November of 1999, voters approved Proposition F 
prohibiting financial institutions from imposing 
surcharges on ATM customers. According to Ms. 
Adrienne Go of the City Attorney's Office, the proposed 
lease provides that if and when Proposition F is deemed 
by a court of competent jurisdiction to be applicable to 
Wells Fargo Bank's operations at the Airport, Wells Fargo 
Bank would have the right to terminate the lease. 

Recommendation: Continue this item to the call of the Chan, as requested 

by the Airport. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

19 



Attachment 




Approximately ten (10) ATM locations as indicated on the attached drawings. 
1. Terminal 3, 2 nd Level, across from Gates 70-71 (1) 

Terminal 3, 1 st Lev., Am. Airlines baggage claim, behind escalator (1) 

Terminal Ex, United Airlines Express Terminal (1) 

Terminal 1, 2 nd Level, B/A C near Gate 42 (1) 

Terminal 1, 1 st Level, behind Carousel 7 (1) 

Terminal 3, 2 nd Level, B/A F before Gate 84 (1) 

Terminal 3, l 3t Level, near carousel 3 (1) 

Rental Car Facility (1) 



2. 
3. 
4. 
5. 
6. 
7. 



9. Terminal 1, 2 nd Level, B/A C, Pre-Security (1) 

10. Terminal 1, 2 nd Level, B/A B across from Gate 22 (1) 



Exhibit A - Page 1 
20 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Item 7 -File 02-1291 



Department: 
Item: 



Grant Amount: 
Grant Period: 
Source of Funds: 

Required Match: 
Indirect Costs: 
Description: 



Airport 

Resolution authorizing the Airport Commission to accept 
and expend a Federal Aviation Administration's Airport 
Improvement Program grant in the amount of 
$5,291,558.00 from the U.S. Department of 
Transportation Federal Aviation Administration. The 
proposed resolution would also approve Contract 
Modification Nos. 4 and 5 to Contract No. 4240.1 with 
URS Corporation for preparation of environmental impact 
studies for the Airport's proposed runway reconfiguration 
project, increasing the current contract amount of 
$11,800,000 by $7,941,558, including the subject grant of 
$5,291,558, and $2,650,000 from the Airport's FY 2002- 
2003 capital budget, for a total contract amount not to 
exceed $19,741,558. 

$5,291,558 

June, 2002 through June, 2004 (two years). 

U.S. Department of Transportation Federal Aviation 
Administration (FAA) Airport Improvement Program 
(AIP) 

$1,763,853, funded from the Airport's FY 2002-2003 

capital budget. 

Indirect costs have not been budgeted in order to 
maximize the funding available for contracted services. 

The proposed resolution would authorize the Airport 
Commission to accept and expend a Federal Aviation 
Administration (FAA.) Airport Improvement Program 
(AIP) grant in the amount of $5,291,558. On April 18, 
2002, the Airport was awarded an AIP grant in the 
amount of $5,291,558 for the Airport's runway 
reconfiguration project. The Airport Commission accepted 
the AIP grant funds on April 29, 2002. 

The proposed resolution would also approve Modification 
No. 4 in the amount of $2,650,000 from existing Airport 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

21 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

capital funds and Modification No. 5 in the amount of 
$5,291,558 from the proposed grant funds to be added to 
the existing contract with URS Corporation (formerly 
URS Greiner-Woodward Clyde) for the preparation of the 
Environmental Impact Statement (EIS) and 
Environmental Impact Report (EIR) for the Airport's 
proposed runway reconfiguration project. Attachment I, 
provided by the Airport, describes the Airport's runway 
reconfiguration project. The EIS/EIR process to be 
completed by URS Corporation (URS) was divided into 
three phases: (i) Phase 1 consists of project planning, 
coordination with Federal agencies, description of 
baseline environmental conditions, and preliminary 
environmental analysis; (ii) Phase 2 consists of completion 
of technical studies and coordination of public 
involvement necessary for the EIS/EIR, preparation of a 
draft EIS/EIR, and preliminary public review of the draft 
EIS/EIR; and (iii) Phase 3 consists of a detailed review of 
comments on the EIS/EIR, development of responses to 
comments, and preparation of the final EIS/EIR and 
supporting documents. 

The original contract award to URS of $1,100,000, 
effective August 1, 1999, funded only the initial portion of 
Phase 1. The scope of work and schedule of payments 
have since been modified three times by the Airport 
Commission, adding the amounts of $5,200,000, 
$5,000,000, and $500,000, respectively, for a total contract 
addition of $10,700,000. The existing contract, as 
modified, is for a total not to exceed the amount of 
$11,800,000, and is for work including all of Phase 1 and 
a portion of Phase 2 (see Comment No. 1). 

According to Mr. Greg Lyman of the Airport, total 
payments to date on the current URS contract amount of 
$11,800,000 are $11,798,150. Including this proposed 
subject grant of $5,291,558 and $2,650,00 from the 
Airport's FY 2002-2003 capital budget, the total 
authorized funds for the URS contract would be 
$19,741,558. Mr. Kevin Kone of the Airport reports that 
the source of funds for the contract payments of 
$11,798,150 was Commercial Paper proceeds used to fund 
the Airport's capital budget appropriations during FYs 
1999-2000, 2000-2001 and 2001-2002. Mr. Kone further 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

22 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



reports that the $4.50 Passenger Facility Charge (PFC) 
can be used for eligible costs up to $113,358,139 for 
studies associated with potential runway reconfiguration 
and for payment of debt service associated with 
expenditures related to the potential runway 
reconfiguration project. The Finance Committee of the 
Board of Supervisors previously approved the release of 
$41,893,072 in PFC funds, including $11,149,353 in costs 
for the URS contract eligible for PFC reimbursement (File 
02-0473). 

Attachment II, provided by the Airport, provides details 
on the $19,741,558 source of funds for the URS contract, 
including (a) the original contract ($1,100,000), (b) the 
three previous contract modifications ($10,700,000) and 
(c) the proposed Modifications No. 4 and No. 5 
($7,941,558). 

The proposed two contract modifications totaling 
$7,941,558 would increase the scope of work of the 
contract to include the completion of Phase 2, including 
the following: 

• preparation of technical reports detailing analysis 
conducted under the existing contract; 

• environmental analyses of hydrodynamics, sediment 
transport, water quality, biology, noise, air quality and 
surface transportation; 

• preparation of technical reports summarizing these 
new analyses; and 

• preparation of the Draft EIS and Draft EIR. 

Modification No. 4 would increase the maximum amount 
of the contract by $2,650,000, to a new total contract 
amount of $14,450,000, to be initially funded from the 
Airport's FY 2002-2003 capital budget. Modification No. 5 
would increase the maximum amount of the contract by 
an additional $5,291,558, to be initially funded from the 
Airport's future capital budgets and reimbursed by the 
subject grant funds. Together, the two proposed 
modifications would increase the maximum amount of the 
contract by $7,941,558, from $11,800,000 to $19,741,558. 
In addition, Modification No. 4 would extend the term of 
the agreement upon approval by the Board of Supervisors 
to June 30, 2005. Therefore, the contract would have a 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

23 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

total term from its original inception of August 1, 1999 of 
five years and eleven months. In addition, Modification 
No. 4 requires the contractor to comply with current City 
and Federal regulations and updates language to reflect 
the current titles of the parties involved. 

The FAA's AIP reimburses Airports for up to 75 percent of 
the costs of eligible airport improvements and planning 
for such improvements, and requires grantee Airports to 
provide a 25 percent match. Therefore, the FAA grant of 
$5,291,558 requires the Airport to provide $1,763,853 in 
matching funds. According to Mr. Lyman, under the 
Airport's agreement with the FAA, these expenditures 
totaling $7,055,411 ($5,291,558 plus $1,763,853) must be 
used for grant-eligible expenses, but may be expended 
retroactively on related work completed under the 
existing contract. Of the $7,055,411 in grant funds and 
Airport matching funds budgeted, a total of $6,505,340 
would be expended on grant-eligible tasks under 
Modifications No. 4 and No. 5. The remaining $550,071, 
which includes $412,553 in FAA grant money and 
$137,518 in Airport matching funds, would be expended 
retroactively on eligible costs included in the existing 
URS contract of $11,800,000. 

Modification Nos. 4 and 5, totaling $7,941,558 less the 
grant eligible amount noted above of $6,505,340 result in 
a balance of $1,436,218, which, according to Mr. Lyman, 
is not eligible for FAA grant funds because (a) $1,110,400 
would be expended on tasks solely related to the 
preparation of the EIR in compliance with State of 
California regulations, which the Federal grant will not 
pay for; and (b) $325,818 would be expended on tasks that 
were included in the modifications after the grant 
proposal had already been submitted and therefore, are 
not eligible for the grant funds. Mr. Lyman explains that 
the $325,818 in additional costs to complete Phase II 
reflects a combination of changes in the scope of work 
necessary to complete a satisfactory EIS/EIR as well as 
increases in projections of the time necessary to complete 
tasks already included in the scope of work necessary to 
complete the EIS/EIR. Mr. Lyman further explains that 
the additional $325,818 not included in the grant proposal 
will be expended on increased efforts for the analysis of 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

24 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Surface Transportation ($60,000), Fisheries ($180,818), 
Recreation Assessment ($40,000), and California 
Environmental Quality Act (CEQA) analysis of a System 
Management Alternative ($45,000). 

Commercial paper, referenced as a funding source in 
Attachment II, is a short-term financing instrument used 
by both corporations and municipal issuers as bridge 
financing until long-term financing is issued. It is used 
on an as-needed basis to meet short-term cash demands. 
Commercial Paper maturities range from one to 270 days. 
As shown in Attachment II, the Airport has budgeted 
Commercial Paper totaling $11,800,000 as the initial 
funding authority for the contract with URS. 

Budget: A summary of the URS contract costs, including the 

proposed Contract Modifications No. 4 and No. 5, is as 
follows: 

Contract Modifications Amount 

Original contract $1,100,000 

Contract Modifications No. 1 - 3 10,700,000 

Contract Modification No. 4 2,650,000 

Contract Modification No. 5 5.291.558 

Total $19,741,558 

Attachment III, provided by the Airport, contains the 
tasks and budget details for the proposed Modification 
Nos. 4 and 5 to the URS contract in the amount of 
$7,941,558. 

Comments: 1. Under Charter Section 9.118(b), all contracts in excess 

of $10,000,000 or which have a term often years or more, 
except for construction contracts, are subject to Board of 
Supervisors approval. The contract with URS, including 
Modifications No. 1 through No. 3, totaled $11,800,00 for 
Phase I and a portion of Phase II, thereby exceeding the 
$10,000,000 threshold by $1,800,000. However, according 
to Ms. Gretchen Nicholson of the City Attorney's Office, 
neither Contract Modification No. 2 nor Contract 
Modifications No. 3 were submitted to the Board of 
Supervisors for approval. On May 31, 2002, the City 
Attorney issued Opinion No. 2002-03 pertaining to the 
application of Charter Section 9.118(b) stating that: 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

25 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



The City Attorney's Office has received questions in the 
past concerning the application of Charter section 9.118(b) 
to construction-related professional services contracts. 
Although we have not previously issued formal advice on 
these questions and they have arisen infrequently, deputies 
have given varying advice to departments concerning this 
provision. 

In Opinion No. 2002-03, the City Attorney advises, with 
respect to contracts pertaining to architectural, 
engineering, and construction management services, that 
Board of Supervisors approval is now required for 
contract modifications, if the modification causes the 
cumulative amount of the contract to exceed $10 million, 
or causes the term of the contract to exceed 10 years. 

Therefore, according to Ms. Nicholson, the City Attorney 
has concluded that the proposed Contract Modifications 
No. 4 and No. 5 are subject to Board of Supervisors 
approval. 

2. According to Mr. Kone, the original contract for 
completion of the EIR/EIS process for the runway 
reconfiguration project was awarded to URS through a 
competitive Request for Proposals (RFP) process. Four 
companies responded to the Airport's RFP, and the 
responses from these four companies were judged by a 
panel including representatives from the FAA, the 
Planning Department's Office of Environmental Review, 
and the Airport. Attachment IV, provided by the Airport, 
explains the selection process of URS regarding 
Modifications No. 4 and No. 5. Mr. Lyman advises that 
for the sake of continuity of analysis, the Airport believes 
it is important to award the work contained in the 
proposed contract modifications to URS, the contractor 
that has conducted all previous related work to date 
under the existing contract. 

3. The proposed grant period is from June, 2002 through 
June, 2004. However, according to Mr. Lyman, the grant 
period will officially commence upon approval of the 
subject resolution by the Board of Supervisors. Mr. 
Lyman explains that the proposed grant is only now 
coming before the Board of Supervisors, approximately 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

two months after the grant period began, because after 
the City Attorney issued an Opinion that the subject 
contract was subject to Board of Supervisors approval, the 
Airport Commission decided to wait until the contract 
modifications had been negotiated, and submit acceptance 
of the grant and the contract modifications to the Board of 
Supervisors together. According to Mr. Kone, to date 
none of the subject AIP grant funds have been expended. 

4. On June 24, 2002, the Board of Supervisors 
appropriated $11,235,148 for the Airport's runway 
reconfiguration project, of which the Board of Supervisors 
placed on reserve $5,000,000 (File 02-1068). The 
$5,000,000 in reserved funds cannot be expended by the 
Airport until such funds are released by the Finance 
Committee. 

5. Attachment V to this report is the Department's Grant 
Information Form, including the Disability Access 
Checklist. 

Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

27 



Attachment I 
Page 1 of 3 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 



INTEROFFICE MEMORANDUM 



TO: Harvey Rose DATE: August 29, 2002 

FROM: Greg Lyman^^ -^ 3 ^n_ — ■ — " — "" 

RE: Description of the Runway R^tolmguration Project 



The following responds to your request to briefly describe the project including the project 
purpose and the draft alternatives proposed for environmental review. 

The runway reconfiguration project includes feasibility studies, planning studies, ge^technical 
studies, environmental studies, mitigation studies, benefit-cost analysis, cost and schedule 
control studies, analysis of no-build solutions to delays and capacity issues, and the 
development of off shore runway construction concepts for environmental studies. The purpose 
of the project is to reduce existing and projected flight delays and accommodate existing and 
anticipated aircraft, as well as projected flight demand, thereby achieving efficient ajport 
operations under all weather conditions while addressing SFO's goal of reducing human 
exposure to noise. 

The Draft Environmental Impact Statement and Draft Environmental Impact Report that are 
under development will evaluate as many as six alternatives that are under consideration. At 
this time, the draft alternatives under consideration include: 

Three No-Build Alternatives 

No-Project Alternative: SFO would neither physically change its existing ninways to 
expand capacity nor modify management strategies to control demand. Instead, the 
market would continue to set the demand for flights at SFO. Those activities previously 
approved in SFO's Master Plan would be undertaken, including light rail system; 
refurbishment of Terminal 2; and rebuilding of Boarding Area B to modem seismic 
standards. 

No Runway Construction Alternative 1: Under this draft alternative, the number of 
scheduled flights at SFO would be strictly limited by assigning each schediuYd flight to 
a specific time slot, called "slot control". Slot control is proposed for the per od of 7:00 
AM to 10:00 PM; late night activity (10:00 PM to 7:00 AM) would be limited to no 
more than 1 999 operation levels. Three draft variations on slot controls would be 
proposed for that 7:00 AM to 10:00 PM period: 

28 



Attachment I 
Page 2 of 3 



Memorandum to Mr. Harvey Rose 
August 29, 2002 
Page 2 of 3 



Variation 1 (30 Slots): The arrival rate at SFO would be limited to 30 arrivals 
per hour between 7:00 AM to 10:00 PM. 

• Variation 2 (38 Slots with Aggressive Technology-): The arrival rare at SFO 
would be limited to 38 arrivals per hour between 7:00 AM to 10:00 PM This 
variation assumes that technologies to improve the unfavorable weather capacity 
of SFO will be developed, certified, and implemented on a much moje 
optimistic and aggressive schedule than currently forecast by the FAA and 
assumed for other Project alternatives. 

Variation 3 (38 Slots with Aggressive Technology & No General Aviation or 

Cargo): The arrival rate at SFO would be limited to 38 arrivals per hour 
between 7:00 AM to 10:00 PM. Variation 3 assumes the same aggressive 
technology as Variation 2 would be in place and would expand the uifavorable 
weather capacity at SFO. This variation also assumes that no genera, aviation or 
cargo flights would be allotted slots to use SFO. 

No Runway Construction Alternative 2: In accordance with Public Resources Code 
Division 13 Section 21151.10, this draft alternative would strictly limit the number of 
scheduled flights at both SFO and OAK through slot controls and would fonn a joint 
management authority (JMA) between SFO and OAK and connect the airports with 
high-speed transit options. Three draft variations would be proposed: 

Variation 1 High-Speed Rail Connection: The variation would include 
construction of a high-speed rail connection between SFO and OAK 3nd the 
arrival rate at SFO would be limited to 30 arrivals per hour and arrivals at OAK 
would be limited to 21 slots. 

Variation 2 High-Speed Ferry Connection: The variation would include 
construction of a high-speed ferry connection between SFO and OAK. and the 
arrival rate a: SFO would be limited to 30 arrivals per hour and arrivf Is at OAK 
would be limited to 21 slots. 

Variation 3 Existing MassTransit Connection: The variation would include 
analysis of existing mass transit connections between SFO and OAK and the 
arrival rate at SFO would be limited to 30 arrivals per hour and arrivals at OAK 
would be limited to 2 1 slots. 

Three Runway Construction Alternatives: The three draft Runway Construction 
Alternatives attempt to address the Project's objectives by physically modifying the layout of 
the existing runways. 

Runway Construction Alternative 1 (also known as A3): This draft 
alternative would involve the construction of (1) a new runway and aisociated 
taxi way and (2) runway safety areas (RSAs) on all existing runways. 

Runway Construction Alternative 2 (also known as BX6); This craft 
alternative would involve the construction of (1) two new runways ard 
associated taxiways and (2) runway safety areas (RSAs) on all existing runways. 

29 



' Attachment I 

Page 3 of 3 
Memorandum to Mr. Harvey Rose 
August 29, 2002 

Page 3 of 3 

Runway Construction Alternative 3 (also known as BXR): The proposed 
changes for this draft alternative are similar to those for Runway Construction 
Alternative 2 (BX6) one of the new runways would be longer and wiiler. 

If you need any additional information, please feel free to contact the Airfield Development 
Bureau. 



Sarah Graham 
Leo Fermin 
Cathy Widener 
Kevin Kone 
Stuart Sunshine 
Tom Kardos 
Deb Ward 
Melba Yee 
Ralph Stewart 



30 



Attachment II 
Page 1 of 2 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 



INTEROFFICE MEMORANDUM 



TO: Harvey Rose DATE: August 14, 2002 

FROM: Greg Lyman^^^^, j^p 

RE: Application of Grant Fnnding to Project Costs 

The following responds to your request to document FAA's statement the 
Entitlement Grant will fund ongoing tasks. FAA Representatives stated the FAA, 
when it converted the application for an Airport Improvement Program 
Discretionary Grant into an Entitlement Grant Offer, considered and agreed the 
grant would cover work being completed under the existing contract 
(Modifications Nos. 2 and 3). The attached table further illustrates how the grant 
will be applied to ongoing and future work. Additionally, the table indicates the 
source of funds to pay the contractor and the source of revenues to repler ish 
those funds. 



Cc: Sarah GTaham 
Leo Fermin 
Cathy Widener 
Kevin Konc 
Stuart Sunshine 
Tom Kardos 
Deb Ward 
Melba Yee 
Ralph Stewart 



31 



Attachment II 
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32 



Attachment III 



Detailed Cost Estimate for E1R and E1S from 11/1/01 through Draft and Comment Period (10/03) 



Task 


Total Cost 


FAA 
Grant 
Type 


Discretionary 
and PFC 
Eligible 


Entitlement E 
Existing 
Contract 

and Mods. 4 
& 5 


liglble 

Included In 
Existing 
Contract 

Budget 


Increase 
After Grant 
Application 


Approx 
Manhours 


Ave. 

Rate 




















Chapter 1.0 Introduction 


$25,000 


a 


$25,000 


$0 


SO 




158 


S158 


Chapter 2.0 Project Objectives 


$25,000 


D 


$25,000 


SO 


$0 




158 


S158 


Chapter 3.0 Alternatives 


S45.000 





$45,000 


$0 


$0 


$20,000 


365 


$117 


Chapter 4.0 Environmental Setting, Impacts, and 
Mitigation 














13S9 


$157 


Noise 


SI 5.000 


D 


$15,000 


$0 


so 




Land Use. Plans and Policies 


$5,000 


D 


$5,000 


$0 


so 




AirQualltv 


sio.ooo 


D 


$10,000 


SC 


$0 




Hvdroloqy/Water Quality 


S50.000 


D 


$50,000 


$0 


$0 




Recreation 


ss.ooo 


D 


$5,000 


$0 


so 




Cultural Resources 


S5.000 


D 


$5,000 


$0 


so 




Biolooical Resources 


$50,000 


D 


$50,000 


$0 


$0 




Erergv 


$15,000 


□ 


$15,000 


SO 


$0 




Visual Resources 


S5.3CC 


D 


$5,000 


$0 


so 




Solid Waste 


S5.DC0 


D 


$5,000 


$0 


$0 




Hazardous Waste 


55,000 


D 


$5,000 


so 


$0 




Public Services and Utilities 


$30,000 


D 


$30,000 


$0 


so 


$25,000 


Surface Transportation 


$10,000 


D 


$10,000 


$0 


$0 




Geology/Seismioity 


$5,000 


D 


$5,000 


SO 


so 




Chapter 4.0 Total 


3215,000 












Chapter 5.0 Habitat Mitiqatlon 


522,000 


D 


S22.0C0 


so 


so 




142 


$155 


Chapter 6.0 Cumulative Impacts, Unavoidable 
Impacts, Growth Inducement 


S15.500 


D 


$15,500 


$0 


so 




125 


S124 


Chapter 7.0 Coordination and Public Involvement 


S58,000 


D 


$55,000 


so 


SO 




440 


$132 


Chapter 8.0 Preparers and Distribution List 


S9.000 


D 


S9.0C0 


$0 


so 




74 


S122 


Chapter 9.0 Bibliography 


S5.5O0 


D 


S5.500 


$0 


so 




55 


S100 


Chapter 10.0 List of Abbreviations, Acronyms and 
Glossary 


SS.OOO 


D 


$5,000 


$0 


so 




50 


S100 


Chapter 11.0 Index 


S15.400 


D 


515.400 


$0 


so 




160 


S96 


Draft EIR Publication 














390 


S120 * 


Administrative Draft EiR 


$50,000 


D 


$50,000 


so 


so 




Camera Readv Draft EIR 


$100,000 


D 


$100,000 


$0 


so 




Draft EIR 


$150,000 


D 


$150,000 


$0 


$0 




Draft EIR Publication Total 


$300,000 












Project Management 


S415.000 


D 


$415,000 


$0 


so 




3050 


S136 




S1.15S.400 




51,155,400 


so 


$0 


$45,000 


5555 


S176 


I EIR Total Cost 


$7,941,558 




$1,155,400 


$7,755. SOB 


$972,450 


$325,818 


56,793 


S140 



Post $11.8 million contract $7,941,558 

Amount of increase after Grant Application $325,818 

Total Entitlement Eligible $7,477,790 

Contract Mod. 4 and 5 Entitlement Eligible $6,505,34-0 

Grant Submission Amount $7,055,410 

FAA 75% $5,291,558 

FAA Portion to Mod 4 and 5 $4,879,005 

FAA Portion to Existing Contract $412,553 

SFO Match 25% $1,753,853 

SFO Match to Mod 4 and 5 $1,626,335 

SFO Match to Exisltng Contract $137,518 

Modification No. 5 Total $2,650,000 

Modification No. 4 Total $5,291 ,558 



Source: Airport Commission 



Pnnl Date: M0VOZ 



Attachment IV 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 



INTEROFFICE MEMORANDUM 

TO: Harvey Ruse DATE: August 14, 2002 

FROM: Greg Lyman^^U^ 3° ""p^-"""^^ 

RE: Selection of URS for Modifications Nos. 4 and 5 



The following responds to your request to document the third party relationship 
between the FAA and the City and how that relationship affects the selection of 
URS for Modifications Nos. 4 and 5 and subsequent modifications, as necessary. 

The contract in question is "owned" by the Federal Aviation Administration (FAA). 
The Airport Commission has entered into a Memorandum of Understanding 
(MOU) with the FAA and OER regarding the contract. The MOU details ttoa 
specific conditions with regard to the manner in which each of the agencies (the 
FAA, OER and SFO) will interact with URS and how the scope of work, 
deliverables and costs will be determined and directed. 

This is the standard arrangement for all contracts with environmental consultants 
who are responsible for conducting the studies and producing the reports and 
documents that will go into the development of an Environmental Impact 
Statement. In actuality it is required by federal law that the contracts be 
structured in this manner. As such, the FAA participated in, and was responsible 
for the selection of the consultant for this contract. The selection was based on 
responses to a Request for Qualifications process in which there were four (4) 
respondents. After conducting interviews w'rth all of the respondents, the FAA 
selected URS Corporation (formerly URS Greiner) and directed SFO to 
administer said contract. 

Cc: Sarah Graham 
Lea Fermin 
Cathy Widener 
Kevin Kone 
Stuart Sunshine 

Tom Kardos . • . 

Deb Ward 
Melba Yee 
Ralph Stewart 



34 



Attachment V 
Page 1 of 3 

File Number: 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a 
Department to accept and expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1. Grant Title: Accept and Expend Grant Funds under the Airport Improvement 

Program (AIP), AIP Project No. 3-06-0221-19 

2. Department: Airport Commission 

3. Contact Person: Cathy Widener Telephone: (650) 821-5023 

4. Grant Approval Status (check one): 

[X] Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $5,291,558.00 

6a. Matching Funds Required: $1,763,853.00 

b. Source(s) of matching funds (if applicable): 

AIP Project No. 3-06-0221-19, $2,324,182 in Capital Improvement Project 
Funds. Funds provided ($2,324,182) exceed required matching funds 
($1,763,853) because some project costs are not eligible for reimbursement 
under this grant program. Total project costs are projected to be 
$7,615,740. 

7a. Grant Source Agency: Federal Aviation Administration 

b. Grant Pass-Through Agency (if applicable): N/A 

8. Proposed Grant Project Summary: 

Please Refer to Page 12 of 25 in the Grant Application, Attachment F 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 
Start Date: June, 2002 End Date: June, 2004 

10. Number of new positions created and funded: 

11. If new positions are created, explain the disposition of employees once the 
grant ends? N/A 



35 



Attachment V 
Page 2 of 3 



12a. Amount budgeted for contractual services: 
$7,615,740.00 

b. Will contractual services be put out to bid? 

Contracted services are reimbursable. This grant reimburses City for 
services rendered on a contract competitively bid in 1999. 

c. If so, will contract services help to further the goals of the department's 

MBE/WBE requirements? 

Contract services are furthering department's DBE requirement. MBE/WBE 

goals do not apply to FAA contracts. 

d. Is this likely to be a one-time or ongoing request for contracting out? 

Ongoing 

13a. Does the budget include indirect costs? []Yes [*] No 

b1. If yes, How much? N/A 

b2. How was the amount calculated? N/A 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency 

[ ] To maximize use of grants funds on direct services 

[X] Other (please explain): 
According to the Lease and Use Agreement between the City of San Francisco 
and major airlines using San Francisco International Airport, the Annual Service 
Payment made to the City shall constitute full satisfaction of all obligations of the 
Airport. Please refer to Attachment I. 

14. Any other significant grant requirements or comments: N/A 



** Disability Access Checklist** 

15. This Grant is intended for activities at (check all that apply): 

[X] Existing Site(s) [X] Existing Structure(s) [] Existing Program(s) or Service(s) 

[] Rehabilitated Site(s) [] Rehabilitated Structures(s) [ ] New Program(s) orService(s) 

[X] New Site(s) [X] New Structure(s) 



36 



Attachment V 
Page 3 of 3 



1 6. The Departmental ADA Coordinator and/or the Mayor's Office on Disability has 
reviewed the proposal and concluded that the project as proposed will be in 
compliance with the Americans with Disabilities Act and all other Federal, State 
and local access laws and regulations and will allow the full inclusion of persons 
with disabilities, or will require unreasonable hardship exceptions, as described in 
the comments section: 



Comments: 



Departmental or Mayor's Office of Disability 

Reviewer: (Name) 

Date Reviewed: 



Department Approval: 

RONALD J. FONG ADA PROGRAM MANAGER 



(Name) (Title) 




37 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Item 8 - File 02-1419 



Department: 
Items: 



Description: 



Department of Human Resources (DHR) 

Ordinance adopting and implementing Amendment 
No. 1 to the 2001-2003 Collective Bargaining 
Agreement between the San Francisco Police 
Officers' Association (POA) and the City and 
County of San Francisco by amending Sections 13 
(A) and (F) to incorporate the parties' agreement to 
clarify their intent with regard to compensation for 
canine officers and to correct clerical errors. These 
amendments are retroactive to July 1, 2001. 

The proposed ordinance would amend the existing 
Memorandum of Understanding (MOU) between 
the San Francisco Police Officers' Association 
(POA) and the City and County of San Francisco to 
clarify current practice for the compensation and 
payment of expenses for members of the POA who 
are assigned to canine dut5 r (i.e., Police Officers 
who train, care for and work with police dogs) and 
to correct for clerical errors in the provisions for 
compensation for members of the POA who are 
assigned to canine duty at the Airport Bureau. The 
existing two year MOU, which is effective from 
July 1, 2001 through June 30, 2003, was approved 
by the Board of Supervisors in August of 2001. 

The proposed Amendment No. 1 to the MOU 
Section 13 (A) would clarify that all POA members 
assigned to canine duty, including those members 
assigned to the Airport Bureau, are to receive 
compensation, in addition to base pay, equal to five 
percent of base wages for the off duty time 
expended in the care and maintenance of the 
assigned canine, including feeding, grooming, 
exercising and cleaning up after the canine. While 
five percent of base wages is being paid currently to 
Police Officers not working at the Airport, Ms. 
Villagomez reports that, due to a clerical error, 
Police Department members of the POA assigned to 
the canine unit at the Airport receive a fixed $105 
biweekly pay premium instead of additional 
compensation based on five percent of base wages. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

38 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



Amendment No. 1 to the MOU would also clarify 
that the additional compensation for POA members 
assigned to canine duty is not to be considered base 
pay, premium pay, nor included in retirement 
benefit calculations or contributions. According to 
Ms. Alice Villagomez of DHR, Amendment No. 1 
would not result in any change to current practices 
for calculating additional compensation under the 
existing MOU for Police Officers assigned to canine 
duty who do not work at the Airport. 

As stated above, under the current MOU, POA 
members assigned to the canine unit at the Airport 
receive a fixed $105 biweekly pay premium rather 
than the additional compensation based on five 
percent of the base wage that other POA members 
assigned to canine duty receive. Under the 
proposed Amendment No. 1, Section 13 (F) would 
be deleted to clarify that Police Officers assigned to 
the Airport who perform canine duties would 
receive compensation, in addition to base pay, 
equal to five percent of base wages for the off duty 
time expended in the care and maintenance of the 
assigned canine. Such additional compensation 
would be identical to the compensation amounts 
paid to all other Police Officers, assigned to canine 
duties who are not assigned to the Airport. Ms. 
Villagomez reports that the provision that POA 
members assigned to the Airport who perform 
canine duties would receive five percent of base 
wages as additional compensation rather than a 
fixed $105 biweekly pay premium should have been 
included in the POA MOU previously approved by 
the Board of Supervisors, but due to a clerical 
error, the correct additional compensation provision 
for Police Officers assigned the Airport Bureau 
Canine Unit was inadvertently omitted from the 
MOU. Therefore, since July 1, 2001, POA members 
assigned to canine duty at the Airport have 
received $105 biweekly rather than the correct 
amount of five percent of base wages biweekly, 
according to Ms. Villagomez (see Comment No. 2). 

The proposed Amendment No. 1 to the MOU also 
states that in addition to the additional 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

39 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

compensation, "the City will provide all canine 
food, supplies and all other expenses directly 
related to the care of the assigned canine." The 
proposed Amendment No. 1 further states that the 
City will provide each member assigned to the 
Airport Bureau who performs canine duties with a 
vehicle for transportation of the dogs from home to 
work and back. Ms. Villagomez states that the 
City currently provides canine food and supplies 
and other expenses directly related to the care of 
the assigned canine to members assigned to canine 
duty and a vehicle for transportation of the dogs 
from home to work and back for members assigned 
to the Airport who perform canine duties under the 
existing MOU. Therefore, this provision would 
simply codify existing practice. 

Comments: 1. As noted above, since July 1, 2001, Police 

Officers assigned to canine duty at the Airport have 
received $105 biweekly rather than the correct 
amount of five percent of the base wage biweekly. 
Mr. Phil Ginsburg of the City Attorney's Office 
advises that members assigned to canine duties at 
the Airport Bureau are entitled to retroactive pay 
equal to the difference between $105 biweekly and 
five percent of the base wage for the period from 
July 1, 2001 to the date of approval of this proposed 
Amendment No. 1. 

2. Ms. Jill Sprague of the City Attorney's Office 
states that seven current and former members of the 
Airport Bureau (three of the plaintiffs are no longer 
assigned to the Airport Bureau Canine Unit) 
assigned to canine duty have filed a claim against 
the City that they were not being properly 
compensated for the off-duty time spent caring for 
assigned canines under the current MOU. Ms. 
Sprague further reports that the claim, which is 
based on the Fair Labor Standards Act, was settled 
on September 6, 2002 and that a Settlement 
Agreement will be submitted for approval to the 
Board of Supervisors at a later date. The settlement 
will result in $250,000 in back pay and damages 
being paid by the City to the seven plaintiffs in the 
claim. Ms. Sprague states that the settlement 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

40 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



encompasses all claims for compensation for off-duty 
care and maintenance of the assigned canine, 
including any claim for retroactive pay by the four 
plaintiff members who are currently employed at the 
Airport Bureau Canine Unit. However, the four 
plaintiff members who remain employed at the 
Airport Bureau will begin receiving five percent of 
base wages as additional compensation for off-duty 
canine care and maintenance as will all other 
members assigned to canine duties at the Airport 
Bureau upon approval of the Board of Supervisors of 
this subject proposed ordinance. 

3. As noted above, Ms. Villagomez reports that 
under the existing MOU the City provides all 
canine food, supplies and all other expenses directly 
related to the care of the assigned canine to 
members assigned to canine duty. There is a 
dispensary for dog food and supplies located near 
the Airport. Members assigned to the Airport who 
perform canine duty can obtain all supplies at the 
dispensary. Ms. Villagomez states that the 
proposed Amendment No. 1 is intended to clarify 
that the City will provide all canine food, supplies 
and all other directly related expenses including 
those not obtained at the Airport dispensary and 
for those members assigned to canine duty 
throughout the San Francisco Police Department. 
As stated above, Amendment No. 1 would add the 
provision that "the City will provide all canine food, 
supplies and all other expenses directly related to 
the care of the assigned canine," which is consistent 
with existing practice. Mr. Ginsburg advises that a 
pending amendment (Amendment No. 2) to the 
MOU between the City and the POA will be 
submitted at a future time to the Board of 
Supervisors to clarify that the City will provide 
only those expenses that are "reasonable and 
necessary." 

4. As shown in the Attachment, provided by the 
Controller's Office, the proposed Amendment No. 1 
to the MOU between the City and POA is 
estimated to cost the City $21,519 in FY 2002-2003 
for the increase in additional compensation for 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

41 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

members assigned to canine duties at the Airport 
Bureau from the flat amount of $105 biweekly to 
five percent of the base wage biweekly. The 
Controller's Office estimates that the total 
increased costs to the City of $21,519 include: (a) 
$15,120 for Canine Compensation equal to five 
percent of the base wage in FY 2002-2003 for all 
members assigned to canine duties at the Airport 
Bureau; (b) $6,070 for retroactive back pay for eight 
members assigned to canine duties at the Airport 
Bureau for FY 2001-2002; and (c) $328 for fringe 
benefits. The amount of $21,519 does not include 
retroactive back pay and damages to be paid to the 
seven member plaintiffs involved with the proposed 
Settlement Agreement which will be submitted in 
separate legislation to the Board of Supervisors for 
future approval. 

Recommendation: Approve the proposed ordinance. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

42 



\\\ CITY AND COUNTY OF SAN FRANCISCO 



Attachment 
^fflC^F* 



HE CONTROLLER 



Edward Harrington 
Controller 

Monique Zmuda 
Deputy Controller 



September 17, 2002 

Ms. Gloria L. Young, Clerk of the Board 

Board of Supervisors 

1 Dr. Carlton B. Goodleir Place 

San Francisco, CA 94102 

Re: File Number 021419 

Amendment No. 1 to Memoranda of Understanding (MOU) FY 2001 - 2003 with San Francisco 
Police Officers' Association (SFPOA) 

Dear Ms. Young: 

In accordance with Ordinance 92-94, I am submitting a cost analysis of an amendment to the FY 2001 - 
2003 MOU between the City and County of San Francisco and San Francisco Police Officers' 
Association (SFPOA). Amendment No. 1 covers the period of the MOU, July 1, 2001 through June 30, 
2003, and affects 23 budgeted positions currently receiving supplemental compensation as canine 
officers, with an overall salary base of approximately $1.8 million. 

Amendment No. 1 clarifies the compensation for canine officers in order to be. consistent with the Federal 
Fair Labor Standard's Act (FSLA) and corrects clerical errors. Under the current MOU, non-Airport 
canine officers receive additional bi-weekly compensation equal to five-percent of their base wages as 
compensation for off duty time authorized and expended for canine related expenses. Due to a clerical 
error. Airport canine officers currently receive a flat S105 biweekly supplement instead of five-percent of 
their base wages. The amendment incorporates the intent of the parties during the contract negotiations to 
provide all canine officers with compensation equal to five-percent of their base wages for off duty time 
expended in the care and maintenance of canines. It also clarifies the definition of the off duty time to 
include feeding, grooming, exercising and cleaning up after the canine. Pursuant to the FSLA, the 
amendment further clarifies that the minimum standard for calculating the pay shall be approximately 
eight hours of overtime per week paid at one and one-half times the hourly federal minimum wage rate. 

Since the non-Airport canine officers are already receiving this rate of pay, the amendment will only 
affect Airport canine officers. Based on our analysis, this provision will resalt in an incremental cost of 
approximately S21.5 19 in FY 2002-2003 including the retroactive pay for eight Airport canine officers. 
The amendment will result in cost increases of approximately 1.18% above base salary in FY 2002-2003. 
Please see Attachment A for specific cost estimates. 

In addition to the special overtime pay provision for time associated with the ordinary and extraordinary 
care of the canine, the amendment clarifies that this pay is separate and distinct from the reasonable and 
necessary expenses associated with the care of the canine. Under the current MOU, the City is responsible 
for all canine food, supplies and all other expenses directly related to the care of the dog. Airport canine 
officers are also provided with vehicles for transportation of canines from their home to work and back. 
Since these expenses are already borne by the City, we have not estimated a cost for these provisions. 



43 

City Hall • 1 Dr. Carlton B. Goodlftl PUct • Room 316 • San Francisco CA 94102-169* 



t\X 415-554-7 



yage i Attachment 

Page 2 of 3 

If you have any additional questions or concerns please contact me at 554-7500 or Pamela Levin of my 
staff at 554-7554. 



Sincerely, 



Edward M. Harrington 
Controller 



cc: Alice ViUagomez, ERD 

Harvey Rose, Budget Analyst 



44 



Attachment 
Page 3 of 3 



Attachment A 

San Francisco Police Officers' Association - Amendment No. 1 to FY 2001-2003 MOU 

Estimated Costs FY 2002-2003 

Controller's Office 

Annual Costs/(Savings) 

Premiums 

Canine Compensation of 5% for 8 hours weekly 
FY 2001-2002 retroactive pay for 8 canine officers 

Wage-Related Fringe Increases 

Total Estimated Incremental Costs 

Incremental Cost % of Salary Base 



FY 2002-2003 




S 

s 


15,120 
6,070 


s 


328 


s 


21,519 




1.18% 



45 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



Item 9 - File 02-1544 
Department: 

Item: 

Amount: 
Source of Funds: 

Description: 



Fire Department 
Department of Public Works 

Hearing to consider the release of reserved funds in the 
amount of $2,071,417 to fund the installation of five 
motorized gate valves in the City's Auxiliary Water 
Supply System (AWSS). 

$2,071,417 

1986 Proposition A Fire Protection Systems Improvement 
General Obligation Bond interest earnings, previously 
appropriated and placed on reserve by the Board of 
Supervisors. 

This request in the amount of $2,071,417 for the release 
of previously appropriated and reserved bond interest 
income monies would be expended for contractual services 
for the installation of five motorized gate valves used by 
the City's Auxiliary Water Supply System (AWSS). The 
AWSS is a system of reservoirs, cisterns, pipelines, pump 
stations, valves, and fireboats, comprising the source of 
water supply for fire protection in emergency situations. 

In November of 1986 the voters of San Francisco 
approved Proposition A, Fire Protection Systems 
Improvement General Obligation Bonds in the amount of 
$46.2 million to be used for the City's AWSS. The City 
sold a total of $46.2 million in Fire Protection Systems 
Improvement General Obligation Bonds ($31 million in 

1987 and $15.2 million in 1991) to finance improvements 
to the City's AWSS. According to Ms. Christine Ragan of 
the Fire Department, the amount of the bond proceeds 
have since been fully appropriated by the Board of 
Supervisors and expended for AWSS capital 
improvements. 

In March of 1996, the Board of Supervisors approved a 
supplemental appropriation ordinance for $3,907,900 
(File 101-95-61) from accrued interest earnings from the 
Fire Protection Systems Improvement Bonds for four 
categories of capital improvement projects: (1) repair and 
BOARD OF SUPERVISORS 
BUDGET ANALYST 

46 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



improvement of the Fireboat Phoenix, (2) implementation 
of motorized AWSS control valves, (3) repairs to the 
AWSS water storage tank, and (4) emergency repairs of 
AWSS facilities. The Board of Supervisors placed 
$3,269,850 of the total appropriation of $3,907,900 on 
reserve (Ordinance No. 127-96) pending the submission of 
budget details. To date, a total of $1,167,942 of the 
$3,269,850 has been released, including $478,250 for the 
repair and improvement of the Fireboat Phoenix, 
$450,125 for emergency repairs to AWSS facilities, and 
$239,567 for repairs to the AWSS water storage tank (see 
Comment No. 1), resulting in a balance of $2,101,908 
remaining on reserve. Approval of this subject request in 
the amount of 82,071,417 would leave a remaining 
balance of $30,491. 

This proposed expenditure of $2,071,417 for the 
installation of five motorized gate valves would be 
completed by an outside contractor at the following 
locations: (a) the southeast corner of Van Ness & Bay 
Street; (b) the southeast corner of Sacramento & Kearny 
Streets; (c) the southeast corner of 17 th & Dolores Streets; 
(d) the southeast corner of 7 th Avenue & Irving Street; 
and (e) the southeast corner of Sutter & Kearny Streets. 
Currently the five locations have valves that must be 
manually opened and closed to control water pressure in 
the City's AWSS. Presently, the Fire Department must 
manually open or close a gate valve, by having Fire 
Department personnel access the gate valve, at each of 
the applicable site locations. The proposed installation of 
motorized gate valves would allow the Fire Department to 
remotely open and close the valves by sending a signal to 
a sensor attached to the motorized gate valves to allow for 
more or less water pressure in the City's AWSS as 
needed. 

Mr. Saed Toloui of DPW, Project Manager for the 
installation of the motorized gate valves, reports that 
DPW has not yet selected a contractor for the installation 
of the five motorized gate valves in the City's AWSS. 
According to Mr. Toloui, a contractor will be selected on 
the basis of a competitive bidding process to be conducted 
by DPW. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

47 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Budget: A summary budget for the proposed installation of the 

five motorized gate valves is as follows: 

Location Amount 

Van Ness & Bay St. $462,773 

Sacramento & Kearny St. 465,031 

17 th St. & Dolores St. 474,060 

7 th Ave. & Irving St. 247,414 

Sutter St. & Kearny St. 422.139 

Total $2,071,417 

Attachment I, provided by the Fire Department, provides 
estimated budget details for contractual services and 
DPW project and contract management costs for the 
proposed release of reserved funds in the amount of 
$2,071,417. 

Comments: 1. Attachment II is a memorandum provided by Chief 

Joseph Asaro of the Fire Department explaining why the 
funds from this subject request of $2,071,417, which were 
appropriated in 1996, were not requested to be released 
prior to this time. 

2. Mr. Toloui states that the proposed budget amounts 
for the installation of five motorized gate valves are 
estimates based on recent contracts for similar work. 

3. The Board of Supervisors previously placed the subject 
requested funds on reserve pending a competitive bidding 
process for the installation of the five motorized gate 
valves and other related work. The purpose of the Board 
of Supervisors reserve was for the Department to report 
back to the Board of Supervisors as to the results of the 
competitive bid process, including selection of the 
contractor and bid amounts. Ms. Tina Olson of DPW 
concurs with the Budget Analyst's observation as to the 
purpose of the Board of Supervisors reserve. However, 
Ms. Olson requests that at this time $32,417 of the 
requested $2,071,417 be released. Attachment III, 
provided by Ms. Olson contains an explanation and the 
budget details for the amount of $32,417 being requested 
at this time. Therefore, $2,039,000 ($2,071,417 less 
$32,417) should continue to be reserved pending the 
submission of the results of the competitive bidding 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

48 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

process to the Board of Supervisors, including the 
identification of the contractor and bid amounts related to 
the motorized gate valve project. 

Recommendations: 1. Release $32,417 of the requested $2,071,417 in 

accordance with the request of the Department of Public 
Works, as discussed in Comment No. 3. 

2. Continue to reserve $2,039,000 ($2,071,417 less 
$32,417), in accordance with Comment No. 3. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

49 



Attachment I 
Page 1 of 5 

SUPPLEMENTAL APPROPRIATION SUMMARY 



TITLE OF REQUEST: 

AWSS Motorized Gate Valves, Various Locations 

AMOUNT OF REQUEST: 

5 2,071,417 

SOURCE OF FUNDS: 

1986 Fire Protection Bonds 

NEED AND PURPOSE: 

In November of 1986, the voters of San Francisco approved Proposition "A" for the 
issuance of $46.2 million in Fire Protection Systems Improvement General Obligation 
Bonds. These bonds were to finance improvements to the City's Auxiliary Water Supply 
System (AWSS) for fire protection. The AWSS is a system of reservoirs, cisterns, 
pipelines, pump stations and fireboats. The City sold $3 1 million of these bonds in 1987 
and $15.2 million in 1991. All the $46.2 million bond funds have been expended to 
improve the AWSS. In March of 1996, the Board of Supervisors approved a 
supplemental appropriation ordinance for $3.9 million from the bond accrued interest for 
additional AWSS improvement projects. 

The Fire Department wishes to appropriate a portion of the remaining bond sale interest, 
in the amount of $ 2,071,417 million, for five (5) AWSS projects as follows. 

PROJECT DESCRTPTION: 

1. Install a motorized gate valve at location #15 the S.E. corner of Van Ness and 
Bay St. 

The installation of a motorized gate valve at this location will expand the AWSS 
ability to control this critical valve from a remote location in the case of a 
catastrophic event. This valve is a division gate valve separating the upper and 
lower zones of the AWSS. This valve is essential to control the flows and pressures 
and preserve the integrity of the AWSS system in the event of a main failure. 



Mobilization 
Trench Shoring 
Mechanical 
Structural 
Electrical 
Controls Work 
Miscellaneous 
Allowances 



$ 13,070 
$ 17,250 
$ 66,700 
$ 44,850 
$ 26,450 
$ 80,500 
$ 25,640 
$76,126 



Base Construction : $ 350,586 

50 



Attachment I 
Page 2 of 5 

Contingencies @10% : S 35,059 

Subtotal : 5 385,644 

Construction Mgmt@l 3% : $50,134 

Contract Prep. And Support @7% : 5 26,995 

Total for Location #15 : 5 462,773 

Negative Impact. If This Request Is Denied: 

If this request is denied, the Fire Department would not have the ability to remotely 
control AWSS gate valves during a catastrophic event. If AWSS personnel can not 
physically reach the valve with the proper equipment to control the flow of water 
disastrous flooding may result and the AWSS system would not be able to support 
aggressive fire fighting operations because of a lack of water. 

2. Install a motorized gate valve at location #18 the S.E. corner of Sacramento 
and Kearney St 



The installation of a motorized gate valve at this location will expand the AWSS 
ability to control this critical valve from a remote location in the case of a 
catastrophic event. This valve is an open control valve to infirm area #1 . This 
valve is essential to control the flows and pressures to infirm area #1 and would 
preserve the integrity of the AWSS system in the event of a main failure. 






Mobilization 
Trench Shoring 
Mechanical 
Structural 
Electrical 
Controls Work 
Miscellaneous 
Allowances 

Base Construction 

Contingencies @10% 

Subtotal 

Construction Mgmt @13% 
Contract Prep. And Support @7% 

Total for Location #18 



5 13,133 


5 12,650 


$ 60,950 


S 57,500 


S 25,300 


S 80,500 


S 25,765 


S 76,498 


5 352,296 


. 5 35,230 


: 5 387,525 


: 5 50,378 


: 5 27,127 



5 465,031 



51 



Attachment I 
Page 3 of 5 



Negative Impact, If This Request Is Denied: 

If this request is denied, the Fire Department would not have the ability to remotely 
control AWSS gate valves during a catastrophic event. If AWSS personnel can not 
physically reach the valve with the proper equipment to control the flow of water 
disastrous flooding may result and the AWSS system would not be able to support 
aggressive fire fighting operations because of a lack of water. 

Install a motorized gate valve at location #50 the S.E. corner of 17 th and 
Dolores St. 



The installation of a motorized gate valve at this location will expand the AWSS 
ability to control this critical valve from a remote location in the case of a 
catastrophic event. This valve is an open con"rol valve to infirm area #6. Tins 
valve is essential to control the flows and pressures in infirm area #6 and would 
preserve the integrity of the AWSS system in the event of a main failure. 



Mobilization 
Trench Shoring 
Mechanical 
Structural 
Electrical 
Controls Work 
Miscellaneous 
Allowances 



$ 13,388 
$ 12,650 
$ 77,050 
$ 43,700 
$ 25,300 
$ 82,800 
$ 26,265 
$ 77,983 



Base Construction 



$359,137 



Contingencies @10% 
Subtotal 



: $35,914 
: $395,050 



Construction Mgmt@l 3% : $51,357 

Contract Prep. And Support @7% : $27,654 



Total for Location #50 



$ 474,060 



4. 



Negative Impact, If This Request Is Denied: 

If this request is denied, the Fire Department would not have the ability to remotely 
control AWSS gate valves during a catastrophic event. If AWSS personnel can not 
physically reach the valve with the proper equipment to control the flow of water 
disastrous flooding may result and the AWSS system would not be able to support 
aggressive fire fighting operations because of a lack of water. 

Install a motorized gate valve at location #71 the S.E. corner of 7 th Avenue and 
Irving St. 



52 



Attachment I 
Page 4 of 5 



The installation of a motorized gate valve at this location will expand the AWSS 
ability to control this critical valve from a remote location in the case of a 
catastrophic event. This valve is a division gate valve between the Ashbury 
pressure zone and the Twin Peaks pressure zone. This valve is essential to control 
the flows and pressures between these two zones and would preserve the integrity 
of the AWSS system in the event of a main failure. 



Mobilization 

Trench Shoring 

Mechanical 

Electrical 

Controls Work 

Miscellaneous 

Allowances 



$ 6,987 
$ 12,650 
$ 9,890 
$ 23,000 
$ 80,500 
$ 13,708 
$ 40,700 



Base Construction 



$ 187,435 



Contingencies @10% : $ 18,744 

Subtotal : $206,179 

Construction Mgmt@l 3% : $26,803 

Contract Prep. And Support @7% : $ 14,433 

Total for Location #71 : $247,414 

Negative Impact. If This Request Is Denied: 

If this request is denied, the Fire Department would not have the ability to remotely 
control AWSS gate valves during a catastrophic event. If AWSS personnel can not 
physically reach the valve with the proper equipment to control the flow of water 
disastrous flooding may result and the AWSS system would not be able to support 
aggressive fire fighting operations because of a lack of water. 

5. Install a motorized gate valve at location #89 the S.E. corner of Sutter and 
Kearney St.l 7 th 



The installation of a motorized gate valve at this location will expand the AWSS 
ability to control this critical valve from a remote location in the case of a 
catastrophic event. This valve is a secondary (feeder) valve to infirm area #1. This 
valve is essential to control the flows and pressures into infirm area #1 and would 
preserve the integrity of the AWSS system in the event of a main failure. 



Mobilization 

Trench Shoring 

Mechanical 

Structural 

Electrical 

Controls Work 

Miscellaneous 



$11,922 
$11,500 
$ 52,900 
$ 43,700 
$ 26,450 
$ 80,500 
$23,389 



53 



Attachment I 
Page 5 of 5 



Allowances : $69,442 

Base Construction : $319,803 

Contingencies @ 10% : $31,980 

Subtotal : $351,783 

Construction Mgmt @1 3% : $45,732 

Contract Prep. And Support @7% : $24,625 

Total for Location #89 : $422,139 

Negative Impact, If This Request Is Denied: 

If this request is denied, the Fire Department would not have the ability to remotely 
control AWSS gate valves during a catastrophic event. If AWSS personnel can not 
physically reach the valve with the proper equipment to control the flow of water 
into this infirm area, disastrous flooding may result and the AWSS system would 
not be able to support aggressive fire fighting operations because of a lack of water. 



54 



CITY AND COUNTY Oh SAN FRANCISCO 

SAN FRANCISCO FIRE DEPARTMENT 



Mario H. Trevino, Chief of Department 

Bcrnie F. Lee, Acting Deputy Chief of Operations 

Joseph C. Asaro, Deputy Chief of Administration 




Attachment II 

698 SECOND STREET 

SAN FRANCISCO, CA 94107-2015 

Telephone: (415)558-3400 



September 19, 2002 



Ms. Sarah Graham 
Budget Analyst Office 
1390 Market Street 
Sari Francisco.. CA 94102 

Re: Release of Reserves for Motorized Valves 

Dear Ms. Graham: 

Around 1997/98, the Department of Public Works and the Fire Department 
received bids for the motorized valve projects but the costs exceeded both the engineer's 
estimates and the funding allocated from the 1986 Fire Protection Bonds. As such, DPW 
with the Fire Department redesigned the projects to include some valves as alternative 
bid items. At that time, there was a high turnover in the mechanical engineering section 
at DPW causing delays in the design of this project. 

In addition, the specification of the project changed which impacted the MUNI 
bus line such that the electrical buses would have to be replaced with diesel buses. This 
cost would need to be borne by the project. 

DPW revisited the project and revised the design, which eliminated any impact 
to the MUNI bus lines but still met the needs of the Fire Department. DPW with the Fire 
Department recreated the bid alternatives in order to ensure the base bid was fundable. 

Sincerely, 

MARIO H. TREVINO 
Chief of Department 




Joseph C. Asaro 

Deputy Chief of Administration 



Contract Documents Preparation 



Motorized Valves #2, DPW Spec. 7090E 

Attachment III 



1 i 








DPW requires $32,417 to cover its costs to: (1) prepare contract documents, (2) issue bids, 


(3) rceive and review bids,(4)award the constrution contract and (5) release remaining bond funds 






I 






Classification 


$/hr 


Estimated 
HRs 


Extension 


5254 


Associate Mechanical Engineer $86 


60 


$5,160 


5241 


Mechanical Engineer 


$118 


30 


$3,540 


5258 


Senior Mechanical Engineer 


$137 


10 $1,370 


5174 -Administrative Engineer 


$127 


20 $2,540 


5364 Engineering Assoc. 


$74 20 $1,480 


1426 


Senior Clerk 


$58 20 


$1,160 


5229 


Assoc. Traffic Engineer 


$86 10 


$860 


5241 


Traffic Engineer 


$118 


20 


$2,360 


5211 


Senior Traffic Engineer 


$137 


5 


$685 


5504 


Project Manager II 


$127 


40 


$5,080 




Reproduction and misc. direct costs 




$8,182 










$32,417 

























Source: DPW 



56 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



Item 10 - File 02-1314 

Department: 

Item: 



Description: 



Department of Consumer Assurance 

Resolution approving the latest revised fees which the 
Department of Consumer Assurance is permitted to 
charge under the California Business and Professions 
Code for testing of weighing and measuring devices when 
a test is voluntarily requested by the owner, or when a 
weighing and measuring device fails its initial mandatory 
test and therefore requires retesting. 

In accordance with the California Business and 
Professions Code Section 12210 and San Francisco 
Administrative Code Section 1.15.1, the Department of 
Consumer Assurance is authorized to charge fees for the 
testing of weighing and measuring devices under two 
circumstances: (a) when the test is voluntarily requested 
by the owner of a device, whether the device is used 
commercially or non-commercially 1 , and (b) when the 
owner of a commercial device fails a mandatory initial 
test and therefore requires a retest. 2 The schedule of 
hourly fees is revised periodically by the California 
Department of Food and Agriculture. 

When the California Department of Food and Agriculture 
revises the schedule of fees, the Department of Consumer 
Assurance is required to forward the revised schedule of 
fees to the Board of Supervisors for ratification before the 



1 Mr. Edward Olsen of the City Attorney's Office advises that a weighing or measuring device used 
for "commercial" purposes includes "the determination of the weight, measure, or count of any 
commodity or thing which is sold on the basis of weight, measure, or count; or the determination of 
the weight, measure, or count of any commodity or thing upon which determination of a charge for 
service is based" (California Business and Professions Code Section 12500(e). Mr. Olsen advises that 
"non-commercial" weighing and measuring devices are those devices which do not conform with the 
above description. According to Mr. Sid Baker of the Department of Consumer Assurance, such fees 
pertain to the testing of weighing and measuring devices for the following businesses and equipment: 
(a) delicatessen, grocery, postal, doctors', school, and scrap scales, (b) service station gasoline, 
taxicab, electric, and cordage meters, (c) odometers, and (d) parking revenue control equipment. 

2 In order to recover the costs of the initial mandatory tests of commercial weighing and measuring 
devices, California Business and Professions Code Section 12240 permits the Board of Supervisors, 
by ordinance, to establish an annual device registration fee payable by the owners of commercial 
weighing and measuring devices. Pursuant to this authority, the Department of Consumer 
Assurance is required to obtain Board of Supervisors approval for establishing the annual device 
registration fee payable by owners of commercial weighing and measuring devices. 

Board of Supervisors 

Budget Analyst 
57 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



Department can charge the latest State-authorized 
revised fees. This proposed resolution would authorize 
the Department of Consumer Assurance to charge the 
applicable fees which were revised by the State as of 
September 1, 1999. 

The Department of Consumer Assurance is currently 
charging fees which were set by the California 
Department of Food and Agriculture on September 24, 
1991. This schedule of fees was ratified by the Board of 
Supervisors on November 11, 1991 (Resolution 979-91). 
On August 10, 1999, the Director of the California 
Department of Food and Agriculture advised counties of 
the latest revised schedule of testing fees effective as of 
September 1, 1999. 

Approval of the subject resolution by the Board of 
Supervisors would authorize the Department of 
Consumer Assurance to charge the 1999 State-authorized 
latest revised schedule of fees. 

Comments: 1. Attachment I, provided by Mr. Edward Olsen of the 

City Attorney's Office, provides additional background 
information regarding this proposed legislation. 

2. If the subject resolution is approved by the Board of 
Supervisors, the Department's existing State -authorized 
1991 fee structure, would be replaced by the State's latest 
authorized revised schedule of fees which became effective 
as of September 1, 1999. Attachment II, provided by Mr. 
Sid Baker of the Department of Consumer Assurance, 
summarizes the existing fees, the proposed revised fees, 
and the hourly rate and percentage increases. 

3. The applicable tests and retests for weighing and 
measuring devices generated $2,310 in fee revenues for 
the Department during calendar year 2001 based on the 
tests and retests of 30 non-commercial devices, as shown 
in Attachment III, provided by Mr. Baker. 

4. Attachment IV is a memorandum, provided by Mr. 
Baker, explaining why the Department did not charge for 
retesting of commercial weighing and measuring devices 
which failed their mandatory initial tests, even though 

Board of Supervisors 

Budget Analyst 
58 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



such fees had been previously authorized by the Board of 
Supervisors. Attachment V is a memorandum provided 
by Mr. Baker explaining why the Department of 
Consumer Assurance has waited until 2002 to obtain 
Board of Supervisors approval to charge the latest revised 
State-authorized fees which became effective on 
September 1, 1999. 

5. According to Mr. Baker, the adoption of this proposed 
resolution is projected to result in annual revenues of 
$26,110, an increase of $23,800 from the $2,310 in 
revenues realized in calendar year 2001. The expenditure 
of an} 7 " additional revenues realized in FY 2002-2003, 
w T hich were not included in the FY 2002-2003 budget, 
would require Board of Supervisors approval through a 
supplemental appropriation. 



Recommendation: Approve the proposed resolution. 



Board of Supervisors 
Budget; Analyst 



City and County of San Francisco 



Dennis J. Herrera 




City Attorney 



Attachment I 

Office of the City Attorney 

Edward A. Olsen 
Deputy City Attorney 

Direct Dial: (415)554-4679 

E-Mail: edward.olsen@sfgov.org 



MEMORANDUM 



TO: Finance Committee ' 

FROM: Edward Olsen 

Deputy City Attorney 

DATE: September 18, 2002 

RE: Department of Consumer Assurance's Schedule of Fees 



The proposed resolution approves an update to the schedule of hourly fees the 
Department of Consumer Assurance is permitted to charge under California Business and 
Professions Code Section 12210 and S.F. Admin. Code Section 1.15.1 for certain types of 
inspections of weighing and measuring devices. 

The schedule of hourly fees that the Department of Consumer Assurance is permitted to 
charge is set by the California Department of Food and Agriculture. This schedule of fees must 
be ratified by the Board of Supervisors in a resolution. See S.F. Admin. Code Section 1.15.1(b). 
When the schedule of hourly fees is updated periodically by the California Department of Food 
and Agriculture, the updated schedule of hourly fees must also be ratified by the Board of 
Supervisors in a resolution. See S.F. Admin. Code Section 1.15.1 (d). 

The Department of Consumer of Assurance has been charging hourly fees in accordance 
with a schedule of hourly fees set by the California Department of Food and Agriculture on 
September 24, 1991. This schedule of hourly fees was ratified by the Board of Supervisors in a 
resolution approved on November 11, 1991. See Resolution No. 979-91. The present 
resolution ratifies the most recent schedule of hourly fees, which was set by the California 
Department of Food and Agriculture on September 1, 1999. 



CityHall-1 Dr. Carlton B. Goodlett Place, Room234- San Francisco, California 94 102-09 17 
Reception: (415) 554-4700 • Facsimile: (415) 554-4747 



h:\recent\f eBexplo.dc£L Q 



03/19/2002 15: 3S 2858776 




Department qf 

Consumer 

ASSURANCE 

REGULATORY COMPLIANCE 
AND AGRICULTURAL STANDARDS 

SAN FRANCISCO COUNTY 



Attachment II 



David C Frieders 

DWECTOt 



Sid baksr 

ASSISTANT DlfeECTOf 



September 18, 2002 



Type of Weighing 

and_Measuring 
Device Subject to 
Dept of Consumer 
Assurance Testing 


Existing Schedule of 

Fees (authorized by 

the State on 

09/24/91] 


- 

Proposed New Schedule of 

Fees (authorized by the 

State on 09/01/99) 


Hourly Rate 

Increase and 

Percentage 

Increase 


Small capacity- 
scales 


£63 .50 per hour + 
mileage 1 


$70 per hour + $1 per mile 
(for vehicles up to 10.000 
lbs.) 


$6.50 
10.24% 


Scales over 3,000 
lbs. capacity 


$80 or $115 per hour + 
mileage 2 


$85 per hour + $1.50 per 
mile (for vehicles between 
10,000 and 40,000 lbs.) 

$125 per hour + $2 per mile 
(for vehicles over 40,000 
lbs.) 


$5 -$10 

6.25% - 

8.70% 


Retail gasoline 
dispensers 


$53 per hour 


$53 per hour + $0.50 per 
mile 


Mileage only 


Wholesale 
petroleum meters 


$60 per hour 


$65 per hour + $0.75 per 
mile 


$5 + mileage 
8.33% 


Liquefied 
petroleum gas 
meters 


$60 per hour 


$65 per hour + $0.75 per 
mile 


$5 + mileage 
8.33% 


All other 
commercial devices 


$60 per hour 


$65 per hour + $0.75 per 
mile 


$5 + mileage 
8.33% 



File:DEVICEfees9902.doc 



1 The mileage change is (a) $0.75 per mile for any vehicle up to 10,000 lbs., (b) $1.25 per mile for 
vehicles 10,000 - 40,000 lbs., and (c) $1.60 per mile for vehicles exceeding 40,000 lbs. 

2 The same mileage rates apply as above. 



AomcuuuPAi 

STANDARDS DIVISION 

sci cesah Chavez, surrs io^a 

SAN F&ANCISCQ CA SU12A 
PHONE: 1/151 621-6100 
FAX: |il5) 283.8776 



AUMANY MARKETS DIVISION 

I0O A1EMANY BOUIEVAED 
SAN FCANCISCO. CA Ml 10 
PHONE: |*1S) 647.9A23 
FAX: |A1J] 643-eSU 



BSCULAIORY COMPLIANCE 
WtlOHTS AND MFAiUKIS DIVISION 
501 CESAt CHAVEZ. Sunt 109A 
SAN FRANCISCO CA 9/12A 
PHONE: |415| 821.4100 
FAX: (A13| 285-8774 



61 



32/19/2002 16:37 2858775 




Department of 

Consumer 

ASSURANCE 

REGULATORY COMPLIANCE 
AND AGRICULTURAL STANDARDS 

SAN FRANCISCO COUNTY 



Attachment III 



DAVID C, FRIEDEPS 



'.;-• S|D RAKER. 
' ASSISTANT; DIRECTOR 



NON COMMERCIAL DEVICE REVENUE YEAR 2001 




SCHOOL DISTRICT 2001 




BALBOBA HIGH SCHOOL 


$63.50 


BURBANK 


$63.50 


BURTON 


$63.50 


CLILIENTHAL 


$63.50 


FRANCISCO 


$63.50 


LINCOLN 


$63.50 


LOWELL 


$63.50 


M L KING 


$63.50 


MCATEER 


$63.50 


MISSION 


$63.50 


O'CONNELL 


$63.50 


V VALLEY 


$63.50 


HORACE MANN MS 


$63.50 


WASHINGTON HS 


$63.50 


WALENBERG HS 


$63.50 


GALIELO HS $ 63.50 X 2 Hr 


$127.00 


Sub-Total 


$1,079.50 


DR. OFFICE 2001 




DR. WILLION OWEN OFFICE , 45 CASTRO ST 


$63.50 


JOSEPHINE MARK M.D , 818 JACKSON ST 


$63.50 


NICHOLAS BURIK M.D ,5224 DIAMOND HEIGHT 


$63.50 


A SABELLA RESTAURANT, 2766 TAYLOR ST 


$63.50 


A SABELLA RESTAURANT, 2766 TAYLOR ST 


$63.50 


ERIC LIM, M.D ,1640 VALENCIA 


$63.50 


DR.PULETTI M.D , 1580 VALENCIA 


$63.50 


OBGYN CLINIC , 525 SPRUCE ST 


$63.50 


SHERIFF DEPT , 555 7TH ST 


$63.50 


ALAN CARTER , 230 COLLINGWOOD ST 


$63.50 


MISSION CARDIOLOGY MEDICAL. 1580 VALENCIA 


$63.50 


US CUSTOM, 555 BATERY ST $63.50 X 2 Hr 


$127.00 


INSPECTION SERVICE INC , PIER 26 


$97.00 


CCSF, DPW 2099 KEARNY ST 5 77 X'4 Hr 


$308.00 


Sub-Total 


$1,230.50 


TOTAL 


$2,310.00 



File: DEVICESfee9902e. doc 



AORICUITUM.I 

STANDARDS DIVISION 

SOI CESAR CHAVEZ. SVinE 109A 
SAN FftANOSCO. CA 9412A 
PHONE. (4IS) 624.6100 
f-AX: (41 5| 2C.SB776 



All MAN i- MABKETS DIVISION 
TOO ALEMANY BOULEVARD 
SAN FEANC1SCO. CA 9411 
PHONE: (415)647.942:! 
FAX: |41 S) 64.2.9514 



RSCULATORT COMPLIANCE 
WEIGHTS AND MEASURES DIVISION 

501 CESAR CHAVEZ, SUIT* 109A 
SAN FRANCISCO. CA 94124 
PHONE: (415) 824-6100 
FAX: 1-41JI 2BS.B774 



62 




_ Department qf 

Consumer 

ASSURANCE 

REGULATORY COMPLIANCE 
AND AGRICULTURAL STANDARDS 

SAN FRANCISCO COUNTY 



Attachment IV 



DAVID C FRIEDER5 

:.•:"■ DiRECTOl 



SID BAKER 

ASSISTANT DIEECTOR 



MEMORANDUM 



9/19/02 

To: Finance Committee 

From: Sid Baker, Assistant 
Subject: Fees not charged 



Authority to charge re-inspection fees was requested by the previous department director in 
1993. This authorization was overlooked and has not been utilized. The department regrets this 
oversight and is taking steps to implement the correct fees. 



File:DEVICEfees9902b.doc 



AoucuuueAi 

STANDARDS DIVISION 

501 CESAR CHAVEZ. SUITE 109A 
SAN HANCBCQ CA 94124 
PHONE: |41S| 424 -6100 
FAX |41J)2B5-e774 



AIIMAMY MARKETS DIVISION 
100 AlEMANY iOUlFVAtD 
SAN FSANC1SCQ CA 941 10 

PHONE: (41 J] 647.9*23 
FAX: |41i) 643-95)4 



63 



regulatory compliance 

WEIGHT!. AND MtASUtIS DMSION 
JCl CESASOIAVEZ, SJITE 109 A 

san FCAsiasca ca 94124 

FHONE. |41J|eiA.4!00 
FAX: |4IS] 283-«77« 



09/19/2002 17:15 2858776 




• Department of 

Consumer 
assurance 

REGirLATORY COMPLIANCE 
AND AGRICULTURAL STANDARDS 

SAN FRANCISCO COUNTY 



Attachment V 



DAVID C FRIEDERS 

DISECTO* 



SID BAKER 

ASSISTANT OIBECIOfl 



Memorandum 



9/19/02 



To: 



Finance Committee 



From: Sid Baker, Assistant 

Subject: Delayed re-ins;pection fee implementation 

The department of Consumer Assurance initially contacted the City Attorney's Office in July, 
2000 with a request to amend the San Francisco Administrative Code to permit the Department 
to charge a professional staff hourly billing rate of $77 for services rendered. After consulting 
with deputies in the City Attorney's Office, reviewing the existing fee provisions in the San 
Francisco Administration Code Section 1.51.1, and participating in discussions with the State 
Division of Measurement Standards at the California Department of Food and Agriculture, this 
request was ultimately modified to draft a resolution adopting the most recent schedule of fees 
set by the Division of Measurement Standards in 1999. Although this process has taken longer 
than we would have liked, the proposed resolution ratifies the most recent schedule of fees that 
the Department is entitled to charge pursuant to state law. 



File:DEVICEfees9902f.doc 



ACRKUITUBAI 
STANDARDS DIVISION 
JO! CESAR CHAVEZ. SlirTE ID? A 
SAN FRANCISCO CA 94124 
PHONE: |4)5| 324-6100 
FAX: (415) 235-8776 



AUMANY MARKETS DIVISION 

1 DO ALEMANT &OULEVASD 

SAN FRANCISCO. CA 941 10 6 4 

PHONE: 1*13] 647-9423 

Fax. (415] 043-3514 



RiGULATOBY COMPLIANCE 
WEIGHTS AMD MEASURES DIVISION 
SOI CESAR CHAVEJ, SUOE 10?A 
SAN FRANCISCO. CA 941 2A 
PHONE: |41£) 824-6100 
FAX: |4)3) 285-8776 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Items 11 and 12 - Files 02-1284 and 02-1283 

Report Summary 

1. The Department of Parking and Traffic (DPT) and the Municipal Transportation 
Agency (MTA) are requesting approval of two resolutions related to the City's 
current four-year contract with PRWT Services Inc. for an automated parking 
citation processing and collections system, including handheld ticket writing 
devices. File 02-1284 is a resolution authorizing the Executive Director of DPT to 
execute a Second Amendment to the agreement to extend the agreement for two 
years. File 02-1283 is a resolution concurring with the Controller's certification 
that automated parking citation processing and collections services can continue 
to be practically performed by a private contractor at a lower cost than if the 
work were performed by City emploj^ees. 

2. On July 31, 1998 the Board of Supervisors approved a four-year contract in an 
amount not to exceed $30,000,000 with PRWT for a comprehensive parking 
citation processing and collection system from September 24, 1998 through 
September 23, 2002. The proposed Second Amendment to the City's contract 
with PRWT would extend the original four year contract by two j^ears, changing 
the end date from September 23, 2002 to September 23, 2004, with a remaining 
option to renew up to two additional years. The proposed Second Amendment 
would also increase the contract's not-to-exceed amount by $19,000,000, from 
$30,000,000 to $49,000,000 for the total six year period of September 24, 1998 
through September 23, 2004. 

3. As shown in Attachment III-A, during the original Contract Years 1 through 4 
(September 24, 1998 through September 23, 2002), the City will pay to PRWT an 
estimated total of $29,293,226 (see Comment No. 1). During Contract Years 5 
and 6, the proposed two } r ear contract extension term of September 24, 2002 
through September 23, 2004, DPT estimates that the City will pay to PRWT an 
estimated total of $17,866,584 (see Comment No. 1). The source of funds for the 
PRWT contract is DPT's annual operating budget. 

The Budget Analyst questioned the not-to-exceed amount of the proposed Second 
Amendment, which is $49,000,000 when, during the current four year contract 
PRWT will be paid an estimated $29,293,226 and during the two year contract 
extension PRWT will be paid an estimated $17,866,584, a total of $47,159,810. 
The estimated total payment to PRWT already includes $1,600,000 in 
contingency funds for upcoming Caltrans construction projects. Therefore, the 
Budget Analyst recommends that Board of Supervisors amend the proposed 
resolution approving the Second Amendment (File 02-1284), and instruct the 
DPT to amend the proposed Second Amendment to the contract with PRWT, to 



Memo to Finance Committee Repor t Summar y 

September 25, 2002 Finance Committee Meeting 

reduce the not-to-exceed amount of the current and proposed extended contract 
with PRWT by $1,800,000, to a not-to-exceed amount of $47,200,000. 

4. Under the City's current and proposed extended contract with PRWT, the City 
pays PRWT the following: (a) a fee for every parking citation processed by 
PRWT; (b) 34 percent of the gross revenues that PRWT collects from citations 
that are determined by DPT to be uncollectable (Special Collections); (c) postage 
costs for the parking citation delinquency notices, second delinquency notices 
and renewal notices for the Residential Parking Permit renewal program; (d) the 
cost of additional equipment purchases; (e) the cost of non-warranty, non- 
corrosion related repairs; and (f) a contingency of $1,600,000 for the purchase of 
additional equipment needed because of upcoming Caltrans construction projects 
such as the Bay Bridge Retrofit project and the Central Freeway project. The six 
cost components are described in detail in Comment No. 1 of this report. 

5. The DPT has classified all fleet (i.e., United Parcel Service and Federal Express 
vans, etc) and rental vehicles as special collections to be assigned to PRWT for 
collection. PRWT receives 34 percent of Special Collection revenue, as noted 
above. The Budget Analyst questions why the DPT is unable to set up 
administrative procedures within the Department to perform the necessary 
tasks to collect parking citation revenue for fleet and rental vehicles since fleet 
operators and rental car agencies are typically easily identified companies doing 
business in and around the City. The establishment of an in-house 
administrative structure to collect fleet and rental vehicles Special Collections 
parking citation revenues could result in additional revenues to the City of up to 
$608,676 in Contract Year 5 and up to $638,002 in Contract Year 6 because the 
City would no longer pay 34 percent of the gross revenues from Special 
Collections on fleet and rental vehicles to PRWT. Instead, the City would retain 
100 percent of the gross revenues from such Special Collections. Such increased 
revenues of up to $608,676 in Contract Year 5 and up to $638,002 in Contract 
Year 6 should be far in excess of increased collection costs for DPT. This issue is 
discussed in detail under Comment 1, Fee for Special Collections under file 02- 
1284. DPT has provided a cost estimate for such collection efforts that the 
Budget Analyst questions. Additionally, the DPT cost estimate is inconsistent 
with the Controller's certification of cost estimates for all Special Collections 
used in their analysis of File 02-1283. 

6. The proposed contract with PRWT includes provisions which have led to the 
following savings according to DPT estimates and as originally reported to the 
Board of Supervisors when the PRWT contract was approved in July of 1998: (1) 
PRWT assumed the $300,000 annual fee for Lockbox processing which used to be 
included in the Treasurer/Tax Collector's budget, (2) PRWT provides the special 
paper used to print the new electronic citations, a savings in the DPT budget of 
$300,000 annually, (3) use of handheld ticket writing devices has ehminated the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

66 



Memo to Finance Committee Report S ummar Y 

September 25, 2002 Finance Committee Meeting 

DPT data entry requirements of $400,000 annually, and (4) various savings in 
microfilm costs, DPT forms, and production and mailing of notices which totaled 
$360,660 annually, for a total annual savings of DPT and Treasurer/Tax 
Collector costs of $1,360,660. 

7. The DPT reports that the first year of the contract, September 24, 1998 through 
September 23, 1999, which included 10 months of operations (December of 1998 
through September of 1999) resulted in a net revenue loss to the City of 
$1,741,334. This net revenue loss to the City of $1,741,334 is in contrast to the 
estimated net revenue increase of $1,868,086 during the first seven months of 
operation reported to the Board of Supervisors by DPT initially in October of 
1999. (See Comment 4 to File 02-1284, Net Revenue to the City from the PRWT 
Contract) 

Over Contract Years 2 through 4, the net revenue gain to the City from the 
additional revenue from the higher collection rate and the net revenue from 
Special Collections have far exceeded the results that DPT had anticipated in 
1998. As shown in Attachment VI, the City had a net revenue gain of 
$11,634,882 during Contract Year 2, when only $1,141,560 was originally 
anticipated, $9,696,412 in Contract Year 3, when only $668,220 was anticipated, 
and $11,927,396 in Contract Year 4 when $1,071,180 was anticipated. 

The Department anticipates that the proposed two year contract extension will 
generate net revenue increases to the City of $11,308,512 per year, or a total of 
$22,617,024. Such net revenue estimates are based on PRWT processing 
2,321,881 citations per year, with an annual collection rate of 78 percent. 

8. In April of 1998, the Board of Supervisors approved a supplemental 
appropriation to fund the salary and fringe benefits for 48 new PCO positions 
(43 Parking Control Officers and 5 Senior Parking Control Officers) in the 
Department's annual budget. Such action by the Board of Supervisors was taken 
during Year 1 of the City's contract with PRWT. The 48 new PCO positions 
represented an increase in PCO staffing of 17.0 percent over the prior level of 
283 total PCO staff (261 Parking Control Officers and 22 Senior Parking Control 
Officers). The number of citations issued annually increased from 2,052,643 in 
Contract Year 1 to 2,311,261 in Contract Year 2, an increase of 12.6 percent 
over Contract Year 1, and 2,440,947 in Contract Year 3, an increase of 18.9 
percent over Contract Year 1. The Budget Analyst notes that the increased 
number of citations issued in Contract Years 2 and 3, and thus the increase in 
total revenue, could be attributed at least in part to the additional PCOs added 
to DPTs budget in April of 1998. (See Comment 9 to File 02-1284). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

67 



Memo to Finance Committee Report S ummar y 

September 25, 2002 Finance Committee Meeting 

9. Since Fiscal Year 1997-98, revenues generated from the collection of parking 
citation fines have increased. In the professional judgement of the Budget 
Analyst, the increase in parking citation revenues collected has resulted from at 
least three factors: (1) the increase of 48 FTE PCOs in the Department's annual 
budget and their resulting ability to issue additional tickets, (2) the increased 
collection efforts by PRWT which are reflected in higher collection rates, and (3) 
the parking fine increases, previously approved by the Board of Supervisors, in 
January of 2002. As shown in Attachment V, the DPT was able to estimate the 
increased revenues beginning in Contract Year 4 attributable to the parking fine 
increases in January of 2002. However, the Department is unable to estimate 
the increased revenue attributable to the additional 48 FTE PCOs, an increase 
of 17.0 percent as noted above, which were added to the Department's annual 
budget during Contract Year 1. (See Comment 10 to File 02-1284). 

10. As of the writing of this report, Mr. Steve Bell of the DPT advises that DPT 
intends to enter into a new Second Amendment with PRWT beginning on 
September 24, 2002 to extend the original contract, which terminates on 
September 23, 2002, by one month or until the proposed two-year contract 
extension is approved by the Board of Supervisors, whichever occurs first. Such a 
new Second Amendment is not subject to Board of Supervisors approval because 
this modification increases the total contract amount by less than $500,000, the 
minimum increase that would require Board of Supervisors approval as provided 
for in the City's Charter Section 9.118, advises Ms. Angela Karikas of the City 
Attorney's Office. Therefore, the Budget Analyst recommends that the proposed 
resolution to approve the two-year contract extension (File 02-1284) be amended 
to refer to a Third Amendment instead of a Second Amendment. (See Comments 
11 and 12 to File 02-1284). 



Recommendations: 

1. The Budget Analyst recommends that Board of Supervisors amend the proposed 
resolution approving the Second Amendment (File 02-1284), and instruct the 
DPT to amend the proposed Second Amendment to reduce the not-to-exceed 
amount of the current and proposed extended contract with PRWT by 
$1,800,000, to a not-to-exceed amount of $47,200,000 in accordance with 
Summary Point 3. 

2. The Budget Analyst recommends that the proposed resolution to approve the 
two-year contract extension (File 02-1284) be amended to refer to a Third 
Amendment instead of a Second Amendment as discussed in accordance with 
Summary Point 10. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

68 



Memo to Finance Committee Report Summary 

September 25, 2002 Finance Committee Meeting 

3. The Budget Analyst considers approval of File 02-1284, as amended, to be a 
policy matter for the Board of Supervisors because: 

(a) The Budget Analyst questioned why the DPT is unable to set up 
administrative procedures within the Department to perform the necessary 
tasks to collect parking fleet and rental vehicles Special Collections parking 
citation revenues, which could result in additional revenues to the City of up 
to $608,676 in Contract Year 5 and up to $638,002 in Contract Year 6 (see 
Summary Point 5). Further, the Budget Analyst questioned the Department's 
estimated annual costs of administering the fleet and rental vehicles portions 
of the Special Collections Program. 

(b) The increase in parking citation revenues collected during the past four years 
has resulted from at least three factors: (1) the increase of 48 FTE PCOs in 
the Department's annual budget and their resulting ability to issue 
additional tickets, (2) the increased collection efforts by PRWT which are 
reflected in higher collection rates, and (3) the parking fine increases in 
January of 2002. The DPT is therefore unable to isolate the amount of 
increased parking citation revenues collected over the past four years due 
solely to the City's contract with PRWT and PRWT's performance under the 
contract (see Summary Point 9). 

4. Approval of File 02-1283, concurring with the Controller's certification that 
automated parking citation processing and collections services can continue to be 
practically performed by a private contractor at a lower cost than if the work 
were performed by City employees, is a policy decision for the Board of 
Supervisors because its approval is dependent on Board of Supervisors approval 
of File 02-1284. 



The full report concerning Items 11 and 12, Files 02-1284 and 02-1283 follows this 
summary. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

69 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Items 11 and 12 - Files 02-1284 and 02-1283 

Department: Department of Parking and Traffic (DPT) 

Metropolitan Transportation Agency (MTA) 

Note: As of July 1, 2002, the Department of Parking and 
Traffic budget became part of the Metropolitan 
Transportation Agency's (MTA) baseline budget. 

Items: File 02-1284: Resolution authorizing the Executive 

Director of the Department of Parking and Traffic to 
execute a Second Amendment to the agreement between 
the City and County of San Francisco and PRWT Services 
Inc. for an automated parking citation processing and 
collections system, including handheld ticket writing 
devices, to extend the agreement for two years. 

File 02-1283: Resolution concurring with the 

Controller's certification that automated parking citation 
processing and collections services can continue to be 
practically performed by a private contractor at a lower 
cost than if the work were performed by City employees. 



FILE 02-1284: PROPOSED SECOND AMENDMENT 

TO THE CITY'S CONTRACT WITH 

PRWT SERVICES, INC. (PRWT) 

Description: On November 1, 1993, the DPT assumed responsibility for 

processing and collecting parking citation fines from the 
Trial Courts, following a State law that decriminalized 
parking violations. Following several years of efforts to 
automate and improve the efficiency of the citation and 
collection process, on July 31, 1998 the Board of 
Supervisors approved a four-year contract in an amount 
not to exceed $30,000,000 with PRWT for a 
comprehensive parking citation processing and collection 
system from September 24, 1998 through September 23, 
2002. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

70 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



In 1998, the DPT selected PRWT and its team of 
subcontractors, then consisting of Lockheed Martin 1 , 
Duncan Management, Bank of America, Direct Mail 
Center, Ace Mailing 2 , and Delta Computer, through a 
Request for Proposals (RFP) process to implement a 
comprehensive parking citation processing and collections 
system that provides the DPT with three major system 
components: 

• A hand-held parking citation issuance and reporting 
system, consisting of electronic hand-held ticket 
writers, personal computers, supporting software, 
networking capabilities, and support services, 

• A parking citation processing system to serve as a 
central repository of information about citations issued 
and the Residential Parking Permit program, and 
consisting of a variety of computer and hardware, 
software, management and support services, and 

• Support services for an Out-of-State and Special 
Collections Program, which pursues the collection of 
parking citations that are determined by DPT to be 
uncollectable from vehicles registered out of State and 
from motorists that have relocated, transferred vehicle 
ownership, or are otherwise difficult to collect. This 
program is referred to as Special Collections. 

The PRWT's responsibilities and the responsibilities of its 
current subcontractors are listed below: 



PRWT 


Project management, local operations, collections, 
training, and subcontractor reporting 


Affiliated Computer 
Services (ACS) 


Computer Services 


Duncan Management 


Supplier of handheld ticket writers and printers 


Bank of America 


Lockbox processing 


Direct Mail Center 


Mailing services 


Genesys 


Data entry services 


Delta Computing 


Computer hardware and maintenance 



Under the City's current contract with PRWT, Parking 
Control Officers (PCOs) issue citations by entering the 



1 Affiliated Computer Services (ACS) has since purchased the division of Lockheed Martin that 
formerly provided this service. 

2 PRWT now subcontracts with Genesys for data entry services instead of Ace Mailing. 

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September 25, 2002 Finance Committee Meeting 



violation and vehicle data directly into an electronic 
handheld ticket writing device, which prints tickets on 
paper that is waterproof and tear resistant. At the end of 
each PCO shift, the handheld device is downloaded into 
the DPT network database. Detailed information 
regarding each citation is available to DPT the following 
day. Notifications are mailed to registered owners 21 
calendar days after issuance. 

DPT staff are able to conduct immediate, online research 
in order to provide service to citation recipients who 
request additional information about a citation or protest 
a citation. 



Provisions of the 
Proposed Second 
Amendment: 



Parking citations can be paid in person at 1380 Howard 
Street and 27 Van Ness, by telephone or internet (paid by 
a credit card), or by mail. Mailed payments are sent to a 
post office lockbox, from which Bank of America collects, 
processes and deposits payments the City's Parking Fine 
account within 24 hours of receipt. 



The provisions of the proposed Second Amendment to the 
City's existing contract with PRWT for an automated 
parking citation processing and collections system are as 
follows: 

(a) DPT would exercise its option to extend the term of the 
original four-year contract period by two additional 
years, Years 5 and 6, for a total contract term of six 
years. With the extension of the PRWT contract by two 
additional years, the DPT would still have the option 
to renew the contract for an additional two years. 

(b) The not-to-exceed contract amount would increase by 
$19,000,000, from $30,000,000 to $49,000,000 for the 
total six year period of September 24, 1998 through 
September 23, 2004. 

(c) The per citation fees paid by the City to PRWT for all 
citations issued annually above 2,000,000 would 
increase by approximately 10 percent from the existing 
fees per citation issued. The per citation processing fee 
structure is shown in Attachment I-A and Comment 
No. 1. The per citation fees paid by the City to PRWT 
are one of the six cost components of the PRWT 

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BUDGET ANALYST 



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September 25, 2002 Finance Committee Meeting 

contract, also including costs for the Special 
Collections Program, postage, equipment purchase, 
equipment repair and a contingency for upcoming 
construction projects. According to Ms. Julia Dawson 
of DPT, the per citation fees include all costs of 
providing the automated parking citation processing 
and collections system, with the exception of the costs 
of postage, non-warranty repairs, and the cost of any 
additional equipment needed by the City above and 
beyond the amount of equipment that was specified in 
the original contract. 

(d) PRWT would be required to pay up to $10,000 in 
Contract Year 5 and up to $11,000 in Contract Year 6 
to repair any corrosion to the print heads of the 
handheld ticket writing devices. 3 Under the existing 
contract, such repair costs were the responsibility of 
the City. Ms. Dawson reports that there have been few 
such repair costs to date. 

(e) PRWT, through Bank of America, would provide 
lockbox services for payments received for the 
Residential Parking Permit Renewal Program. This 
would include up to 40,000 renewals per year. Such 
services are currently provided in-house by DPT staff 
(see Comment No. 6). 

(f) The contract would be amended to require PRWT and 
its subcontractors to comply with the City's Minimum 
Compensation Ordinance and Health Care 
Accountability Ordinance. 

Amount Paid by the 

City to PRWT: During the original Contract Years 1 through 4 

(September 24, 1998 through September 23, 2002), the 
City will pay to PRWT an estimated total of $29,293,226 
(see Comment No. 1). During Contract Years 5 and 6, the 
proposed two year contract extension term of September 
24, 2002 through September 23, 2004, DPT estimates that 
the City will pay to PRWT an estimated total of 
$17,866,584 (see Comment No. 1). 



3 Corrosion damage is typically due to the climate conditions in the Bay Area (moist cool air) and, 
under the proposed Second Amendment, such repairs would be the responsibility of PRWT up to 
$10,000 in Contract Year 5 and $11,000 in Contract Year 6. These amounts are the total maximum 
amounts for all of the City's 281 handheld ticket writing devices. The City is and would continue to 
be responsible for other equipment damage not covered by warranty, such as cracked display screens 
or internal damage. 

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BUDGET ANALYST 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



Source of Funds: 

Proposed Extended 
Contract Term: 



DPT's annual operating budget. 



Two years. Tbe original contract with PRWT was for an 
initial term of four years, from September 24, 1998 
through September 23, 2002, with one option to renew for 
up to four additional years. The proposed Second 
Amendment to the City's contract with PRWT would 
extend the original four year contract by two years, 
changing the end date from September 23, 2002 to 
September 23, 2004, with a remaining option to renew up 
to two additional years. 



Comments on 
File 02-1284: 



1. Costs of the Current and Proposed Extended PRWT 

Contract 

Under the City's current and proposed extended contract 

with PRWT, the City pays PRWT the following: 

(a) a fee for every parking citation processed by PRWT as 
described below. Under the proposed extended 
contract, such fees per parking citation processed for 
all citations issued annually above 2,000,000 would 
increase by approximately 10 percent; 

(b) 34 percent of the gross revenues that PRWT collects 
from citations that are determined by DPT to be 
uncollectable (Special Collections). PRWT is currently 
and would continue to receive 34 percent of the gross 
revenues from Special Collections; 

(c) postage costs for the parking citation delinquency 
notices, second delinquency notices and renewal 
notices for the Residential Parking Permit renewal 
program (mailing costs for Special Collection notices 
are included in the 34 percent of gross revenues 
payment to PRWT). PRWT is currently and would 
continue to be reimbursed for such postage costs. 

(d) the cost of additional equipment purchases including 
handheld ticket writing devices, the cradles for the 
handheld ticket writing devices, and the print heads. 
Attachment I-B, provided by DPT, shows the amount 
of equipment authorized to be purchased under the 
original contract, the First Amendment to the original 
contract, and the proposed Second Amendment. 



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September 25, 2002 Finance Committee Meeting 



(e) the cost of non-warranty, non-corrosion related 
repairs, which was a component of the current contract 
added under the First Amendment; and 

(f) a contingency of $1,600,000 for the purchase of 
additional equipment needed because of upcoming 
construction projects such as the Bay Bridge Retrofit 
project and the Central Freeway project. These 
construction projects would require the deployment of 
additional PCO, who would need equipment. Such 
additional equipment includes handheld ticket writing 
devices, the cradles for the handheld ticket writing 
devices, the print heads, the computer stations and the 
related software necessary. There is no contingency for 
construction projects in the existing four year contract. 
A contingency for upcoming construction projects 
would be new in the proposed Second Amendment. 

The six cost components of the current and proposed 
extended PRWT contract are described below in detail. 

Fee Per Parking Citation Processed 

One of the six cost components of the PRWT contract is 
the fee per parking citation processed. Processing a 
citation means that PRWT provides the ticket writing 
equipment and software that issues the citation. PRWT 
downloads that citation onto a computer and then uploads 
that citation to a server system. The system automatically 
requests the address of the registered vehicle owner from 
the Department of Motor Vehicles (DMV) computer for 
each citation. If the citation is not paid within 21 days of 
issuance, the system uses the DMV 7 address to generate a 
first collection notice. If DPT does not receive a payment 
on the first notice within 21 days, then DPT adds an 
additional penalty of $12 and the system sends a second 
notice. If DPT does not receive a payment on the second 
notice within 28 days, then DPT adds an additional 
penalty of $15 and the system sends a registration hold 
record to the DMV's computer for the amount due. If a 
payment is received by DPT, the lockbox processing 
agent, Bank of America, deposits the check and scans the 
accompanying notice so that the payment is credited to 
the citation. The system also provides a cashiering system 
for in-person transactions and detailed accounting records 
for every ticket processed, including adjustments, 
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Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



adjudication information, penalties, revenue splits to 
other agencies, and any other relevant financial 
information. Ms. Dawson advises that PRWT is paid a 
one-time fee for each parking citation processed, 
regardless of whether or not the fines from that parking 
citation are collected. 



The fee structure under the existing four-year contract is 
shown below and in Attachment I, provided by DPT: 



Citation Processed 
per Year 

First 2 million 
Next 250,000 
Next 250,000 
Next 250,000 
Next 250,000 
Over 3 million 



Fees Payable to PRWT 



Year 1 


Year 2 


Year 3 


Year 4 


$2,405 


$2,355 


$2.29 


$2.29 


$2.19 


$2.14 


$2.09 


$2.09 


$1.69 


$1.64 


$1.59 


$1.59 


$1.18 


$1.14 


$1.13 


$1.13 


$0.93 


$0.93 


$0.93 


$0.93 


$0.73 


$0.73 


$0.73 


$0.73 



The fee structure under the proposed two year Second 
Amendment to the existing contract with PRWT 
compared to the current (Year 4) fees is shown below and 
in Attachment I: 

Fees Payable to PRWT 



Citation Processed 




Year 5 


Year 6 


per Year 


Year 4 


Proposed 


Proposed 


First 2 million 


$2.29 


$2.29 


$2.29 


Next 250,000 


$2.09 


$2.29 


$2.29 


Next 250,000 


$1.59 


$1.75 


$1.75 


Next 250,000 


$1.13 


$1.24 


$1.24 


Next 250,000 


$0.93 


$1.02 


$1.02 


Over 3 million 


$0.73 


$0.80 


$0.80 



The fee for the first 2,000,000 citations processed would 
be the same under the proposed Second Amendment as 
under Year 4 of the current contract, or $2.29 per citation. 
The proposed PRWT fee per citation processed for the 
2,000,001 st citation and above in Contract Years 5 and 6 

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Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



would increase over Contract Year 4 by approximately 10 
percent. Ms. Dawson states in the attached memorandum 
(Attachment II) that the reason the fee per citation 
processed for citations in excess of 2,000,000 annually 
would increase by 10 percent is as follows: 

"DPT negotiated various service 
improvements, new services, new 
maintenance requirements, and computer 
replacement parts in the proposed contract 
extension. All of these negotiated 
improvements will result in increased costs 
to our vendor. DPT researched the 
percentage increase in the nationwide CPI 
between 1998 and 2002, which was 10% 
according to the U.S. Department of Labor, 
Bureau of Labor Statistics Inflation 
Calculator, and proposed to adjust the 
pricing in the contract by 10% for citations 
issued over the 2 million threshold to 
compensate the vendor for providing 
additional services. Since Parking and 
Traffic issues 2.2 million citations per year, 
the increased cost is only on citations over 
the 2 million threshold, which is a small 
percentage of our overall issuance." 
As shown in Attachment I, the total number of citations 
processed was 2,052,643 in Year 1 of the existing contract 
and is projected to be 2,321,881 in Years 5 and 6 of the 
proposed extended contract. 

As shown in the table above, over the four -year term of 
the existing contract, the fee per citation processed has 
decreased every year between Contract Years 1 through 3 
and remained unchanged in Contract Year 4. The 
proposed increases in the per citation fees between 
Contract Year 4, under the existing contract, and 
Contract Year 5, under the proposed Second Amendment, 
would therefore be the first fee increases during the term 
of the City's contract with PRWT. 

As shown in Attachment III-A, provided by DPT, the DPT 
will pay to PRWT an estimated total of $20,902,126 in 
citation processing fees during Years 1 through 4 of the 
existing contract, consisting of actual payments of 
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September 25, 2002 Finance Committee Meeting 



$4,925,288 in Year 1, $5,345,468 in Year 2, $5,406,106 in 
Year 3, and an estimated payment of $5,225,264 in Year 4 
(for the contract year ending September 23, 2002), for 
average total expenditures of $5,225,532 over the first 
four years. As also shown in Attachment III-A, the DPT 
anticipates that it will pay to PRWT a total of $10,556,584 
in citation processing fees over the two-year term of the 
proposed Second Amendment, or $5,278,292 per year. 
This total would represent an increase in average annual 
citation processing fee payments of approximately one 
percent. 

Fee for Special Collections 

In addition to the citation processing fees, PRWT receives 
34 percent of the gross revenues collected from Special 
Collections, including any late fees associated with such 
Special Collections. Special Collections are collections 
from parking citations which are classified by DPT as 
uncollectable. Ms. Dawson explains in Attachment II that 
parking citations are classified by DPT as uncollectable if 
they are returned to DPT by mail as undeliverable, Out- 
of-State unpaid citations, citations rejected by the State 
DMV system, DMV holds over one year old 4 , leased or 
rented vehicles, declaration of non-ownership at the time 
the parking citation was issued by a citation recipient, 
and fleet vehicles such as Federal Express or UPS vans. 
Attachment III-B, provided by DPT, shows the number of 
Special Collection citations that DPT referred to PRWT 
for the Special Collection program. When questioned why 
fleet and rental vehicles are assigned as special 
collections, Ms. Dawson responds in Attachment III-C by 
stating: 

"To be effective, both of these programs 
require continuous, consistent and effective 
administration, maintenance of records, 
software modifications and enhancements, 
and detailed updating of records in the 
citation processing system. Parking and 
Traffic has not historically maintained these 
types of programs on a large scale and did 



4 A DMV hold is when an unpaid parking citation fee is linked in the DMV database to an 
automobile's registration fee. The DPT anticipates that, because registration fees are to be paid 
annually, any DMV hold over one year old is unlikely to be paid and is deemed to be uncollectable. 

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not have the staff resources to market the 
program and increase the collection on these 
types of citations." 
The City receives 66 percent of such gross Special 
Collection revenues. As shown in Attachment IV, provided 
by DPT, the City is projected to receive $3,184,445 for 
Contract Year 4, which is the year ending September 23, 
2002, and is projected to receive $4,076,471 in Contract 
Year 5. 

As shown in Attachment III-A, the City will pay to PRWT 
an estimated total of $6,031,359 in Special Collection fees 
during Contract Years 1 through 4. The DPT anticipates 
that the City will pay to PRWT an estimated $4,200,000 
in special collection fees over the proposed two-year term 
of the extended contract, or $2,100,000 per year. As stated 
by Ms. Dawson in Attachment II, DPT is projecting a 
revenue increase for the Special Collections program in 
Contract Years 5 and 6 because PRWT "plans to develop 
program criteria and begin to collect on two collection 
categories (returned mail, declaration of non-ownership) 
that were part of the original contract but were never 
implemented. DPT also expects PRWT to increase the 
number of rental car companies and fleets that 
participate in those two collections programs." Ms. 
Dawson states in Attachment III-C, "Without belonging to 
the fleet program, each citation is noticed individually, 
making it less likely that it will be collected." Ms. Dawson 
continues is Attachment III-C, "For the rental vehicle 
program, recruitment of new companies is also vital, 
because without information from the rental car 
companies, the citations are not collectable." 

The Budget Analyst questions why the DPT is unable to 
set up administrative procedures within the Department 
to perform the necessary tasks to collect parking fleet and 
rental vehicles Special Collections parking citation 
revenues. The establishment of an in-house 
administrative structure to collect fleet and rental 
vehicles Special Collections parking citation revenues 
could result in additional revenues to the City of up to 
$608,676 in Contract Year 5 and up to $638,002 in 
Contract Year 6 because the City would no longer pay 34 
percent of the gross revenues from Special Collections on 
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Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



fleet and rental vehicles to PRWT. Instead, the City 
would retain 100 percent of the gross revenues from such 
Special Collections. According to Ms. Dawson, the cost to 
the City of administering the Special Collections Program 
for fleet and rental vehicles could total approximately 
$847,911 annually, including the following estimated total 
annual costs: 3.5 FTEs at $220,976, fringe benefits at 
$55,244, the contracted services of a computer 
analyst/programmer at $175 per hour for 2,427 hours at 
$424,666, postage and lockbox costs at $27,025, and other 
computer processing costs including costs associated with 
producing daily, weekly, and monthly computer reports, 
computer processing charges, and any routine 
maintenance costs for computer record storage and access, 
at $120,000. 

In the Controller's analysis of the estimated City costs for 
Special Collections, which are included in the Personnel 
Costs of the City-Operated Service Costs for File 02-1283, 
the Controller estimated that 3.0 FTEs at an annual cost 
of $209,018 at the lowest salary step and $260,087 at the 
highest salary step would be required to administer the 
entire Special Collections Program. However, Ms. Dawson 
estimated that 3.5 FTEs at an annual cost of $220,976 
would be required to administer only the fleet and rental 
vehicles portions of the Special Collections Program. 
Further, the Budget Analyst questions why the DPT 
would find it necessary to retain the services of a 
computer analyst/programmer at $175 per hour for 2,427 
hours at an estimated annual cost of $424,666. The DPT 
has not provided the Budget Analyst with a sufficient 
explanation for why these annual computer programming 
costs are necessary to the functions of the fleet and rental 
vehicles portion of the Special Collections Program. 

Postage Costs 

Under the City's current and proposed extended contract 
with PRWT, the City reimburses PRWT for postage costs 
for mailing parking citation delinquency notices, second 
delinquency notices and Residential Permit Program 
renewal notices. 

As shown in Attachment III-A, during Years 1 through 4, 
the DPT will pay to PRWT an estimated total of 
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Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



$2,071,811 for postage costs. The DPT anticipates that 
the City will pay to PRWT an estimated $1,380,000 in 
postage costs over the two year term of the proposed 
Second Amendment, or $660,000 in Contract Year 5 and 
$720,000 in Contract Year 6. 

Additional Equipment Purchase 

As shown in Attachment III-A and according to Ms. 
Dawson, DPT purchased additional equipment that was 
above and beyond the amount of equipment specified in 
the original contract. Such additional equipment includes 
handheld ticket writing devices, the cradles for the 
handheld ticket writing devices, and the print heads. Ms. 
Dawson reports that the purchase of additional 
equipment at a cost of $239,170 in Contract Year 3 was 
authorized by the First Amendment to the original 
contract. The DPT anticipates that it will spend an 
estimated $35,000 per year, or a total of $70,000, on 
equipment throughout the two-year contract extension 
term, as shown in Attachment III-A. The purchase of such 
additional equipment would be authorized upon approval 
by the Board of Supervisors of the proposed resolution, 
File 02-1284. 

Equipment Repair 

As shown in Attachment III-A, the DPT paid to PRWT 
$48,760 in Contract Year 4 for repairing non-warranty, 
non-corrosion related equipment damage. The DPT 
anticipates that it will pay to PRWT $30,000 each year, or 
a total of $60,000 over the two year contract extension 
period, for repairing such equipment damage. According 
to Ms. Dawson, non-warranty, non-corrosion related 
equipment damage occurs when a piece of equipment, 
typically a handheld ticket writing device or a print head, 
is damaged during normal use. Warranty related 
equipment damage occurs when a piece of equipment is 
defective. 

Contingency for Upcoming Caltrans Construction Projects 
Ms. Dawson states in Attachment II, "We added a 10% 
contingency in case we are asked to deploy Parking 
Control Officers for upcoming construction projects, such 
as the Bay Bridge Retrofit and the Central Freeway, and 
they need additional equipment." As shown in 
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September 25, 2002 Finance Committee Meeting 



Attachment III-A, $1,600,000 is less than 10 percent of 
$16,266,584, which is the sum of the anticipated costs in 
Contract Years 5 and 6 for citation processing fees, 
Special Collection fees, postage costs, equipment repair 
and equipment purchase. Ms. Dawson reports that the 
Bay Bridge Retrofit and the Central Freeway construction 
projects, both Caltrans projects, are scheduled to begin in 
the Fall of 2002. Any additional equipment for the PCOs 
deployed as a result of new construction projects would be 
purchased through the City's contract with PRWT. 
According to Mr. Steve Bell of DPT, Caltrans would 
reimburse the City for the time that a PCO is deployed to 
Caltrans project related traffic control duties which will 
likely total two days per additional PCO per week, or 0.4 
FTE. Mr. Bell reports that traffic control duties generally 
do not involve parking citation issuance. Mr. Bell further 
reports that, at this time, Caltrans does not intend to 
reimburse the City for additional costs for a PCO when he 
or she is deployed to general enforcement duties that 
involve parking citation issuance, such as personnel costs, 
citation processing fees, Special Collection fees, postage 
costs, equipment repair and equipment purchase. 

According to Ms. Dawson, in the future the Board of 
Supervisors will be required to approve a Traffic 
Mitigation Plan for each Caltrans project. A Traffic 
Mitigation Plan is an agreement between Caltrans and 
the City on the responsibilities of the two parties during 
Caltrans construction projects. Under such an agreement, 
the Board of Supervisors would approve the addition of 
any PCOs and the purchase of any additional equipment 
in DPT's budget. If the Board of Supervisors approves the 
Traffic Mitigation Plans for the Bay Bridge Retrofit 
project and the Central Freeway project requiring 
additional PCOs, then additional equipment for any new 
PCOs would be purchased through the City's contract 
with PRWT, as previously noted. 

Total Amount Paid to PRWT 

According to the terms of the current four year contract, 
the City's cost of the contract cannot exceed $30,000,000. 
The proposed Second Amendment to the current contract 
would increase the not-to-exceed amount by $19,000,000, 
for a new not-to-exceed amount of $49,000,000. 
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Using the pricing structure shown above and assuming 
issuance of 2,321,881 citations per year in Contract Years 
5 and 6 as projected in Attachment IV, the City's total 
cost of the PRWT contract in Contract Years 5 and 6, as 
shown in Attachment III-A, is anticipated to total 
$17,866,584 consisting of the following costs: 



Citation Processing Fees 


$10,556,584 


Special Collection Fees 


4,200,000 


Postage Costs 


1,380,000 


Equipment Purchases 


70,000 


Equipment Repair 


60,000 


Contingency for Upcoming 
Construction Projects 


1,600,000 


TOTAL 


$17,866,584 



According to DPT, and as shown in Attachment III-A, the 
projected total cost of the PRWT contract in Contract 
Years 1 through 4 is anticipated to total $29,293,226 
consisting of the following costs: 



Citation Processing Fees 


$20,902,126 


Special Collection Fees 


6,031,359 


Postage Costs 


2,071,811 


Equipment Purchases 


239,170 


Equipment Repair 


48,760 


TOTAL 


$29,293,226 



The Budget Analyst questioned the not-to-exceed amount 
of the proposed Second Amendment, which is $49,000,000 
when, during the current four year contract PRWT will be 
paid an estimated $29,293,226 and during the two year 
contract extension PRWT will be paid an estimated 
$17,866,584, a total of $47,159,810. Ms. Dawson responds 
in Attachment II, "We rounded the not to exceed amount 
of the contract up to $49 million to include purchasing 
ability for unanticipated events, such as higher issuance 
and higher special collections. All of these increased costs 
would directly benefit the City because they would also 
generate higher revenues." 



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2. Collection Rates and Additional Annual Revenues 
According to Ms. Dawson, the parking fine revenue 
collection rate is based on the number of citations 
collected as a percentage of the total citations processed 
annually. According to Ms. Dawson, in Fiscal Year 1997- 
1998, prior to the City's contract with PRWT, DPT 
collected approximately 53 percent of parking citations 
issued. In addition, approximately 14 percent of the 
citations processed were collected by the DMV (and 
forwarded to the City) during vehicle registration 
processes. Also, an additional approximately two percent 
of the citations issued were collected through a contract 
by City Tow after a vehicle was towed and by the 
Residential Permit Program at the time a residential 
permit was issued or renewed. Overall, this resulted in a 
total DPT collection rate of 69 percent. 

As shown in Attachment IV, provided by Ms. Dawson, 
during Contract Year 1, the City's collection rate 
increased from 69 percent to 73 percent 5 . By Contract 
Year 2, the City's collection rate had increased to 78 
percent and has remained at that level during Contract 
Years 3 and 4, according to DPT. The City's collection rate 
is projected to remain at 78 percent during the two year 
period of the proposed Second Amendment, or Contract 
Years 5 and 6. In the attached memorandum (Attachment 
II), Ms. Dawson states that "The PRWT contract has 
allowed the City to receive its payments sooner, which 
ultimately results in higher revenue. For parking citation 
collections, the sooner that the City can notice a citation, 
the more likely it is to receive a payment for that citation. 
As time passes, it becomes more likely that the vehicle 
will change ownership, making it much more difficult to 
collect any parking citation written against its license 
plate." Ms Dawson continues, "Parking and Traffic has 
not altered the way that it performs enforcement and 
collection functions except for the changes that are a 
direct result of the PRWT contract." 



5 Ms. Dawson notes that although Contract Year 1 is the period of September 24, 1998 through 
September 23, 1999, the PRWT did not begin processing citations until November of 1998. Therefore, 
the collection rate of 73 percent in Contract Year 1 is for the period of November of 1998 through 
September 23, 1999. 

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According to Ms. Dawson, in January, 2002, during 
Contract Year 4, the Board of Supervisors approved 
parking fine increases for certain parking violations that 
were perceived to promote traffic safety and traffic flow. 
As shown in Attachment V, the parking fine increases in 
January, 2002 are anticipated to result in additional 
revenues of $1,623,823 in Contract Year 4, $2,165,098 in 
Contract Year 5, and $2,165,098 in Contract Year 6, or a 
total of $5,954,019. However, increased revenues 
resulting from such fine increases are not used by DPT in 
their calculation of net revenues resulting from the PRWT 
contract, according to Ms. Dawson and as shown in 
Attachment V. 

As shown in Attachment IV, the collection rate increases 
have resulted in additional revenues of $2,011,266 in 
Contract Year 1, in comparison to total revenues collected 
in the base year of Fiscal Year 1997-98, $15,720,603 in 
Contract Year 2, $13,952,708 in Contract Year 3, and 
anticipated additional revenues of $17,608,969 in 
Contract Year 4. The DPT anticipates that a continued 
collection rate of 78 percent over Contract Years 5 and 6 
would result in additional revenues of $17,564,462 per 
year, for total additional revenues over the six year term 
of the contract of $84,422,470. As noted above, the 
parking fine increases in January, 2002, are anticipated 
to result in a total revenue increase to the City of 
$5,954,019 during Contract Years 4, 5 and 6. Thus, the 
net additional estimated revenues over the six year term 
of the contract, less additional revenues from fine 
increases, total $78,468,451 ($84,422,470 less $5,954,019). 



3. City Savings 

The proposed contract with PRWT includes provisions 
which have led to the following savings: (1) PRWT 
assumed the $300,000 annual fee for Lockbox processing 
which used to be included in the Treasurer/Tax Collector's 
budget, (2) PRWT provides the special paper used to print 
the new electronic citations, a savings in the DPT budget 
of $300,000 annually, (3) use of handheld ticket writing 
devices has eliminated the DPT data entry requirements 
of $400,000 annually, and (4) various savings in microfilm 
costs, DPT forms, and production and mailing of notices 
BOARD OF SUPERVISORS 
BUDGET ANALYST 

85 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



which totaled $360,660 annually, for a total annual 
savings of DPT and Treasurer/Tax Collector costs of 
$1,360,660. DPT savings are reflected in the cost-benefit 
analysis shown in Attachment V, provided by DPT. 



4. Net Revenue to the City from the PRWT Contract 
The DPT calculates net revenue by comparing the 
additional processing costs paid to PRWT less the City's 
expenditure savings described above with the additional 
revenue generated during the term of the PRWT contract 
less parking fine increases and postage for second 
notices 6 . According to Ms. Dawson, net savings to the City 
is not defined in the contract. Attachment VI, provided by 
DPT, shows the Department's projections of net revenue 
that were made in July of 1998, when the Board of 
Supervisors considered the original four year contract. As 
shown in Attachment VI, DPT previously estimated that 
the PRWT citation processing contract would produce a 
net benefit to the City of additional parking citation 
revenue of $971,400 in the contract's first year of 
operation over parking citation revenues generated in 
Fiscal Year 1997-98 of $49,800,000, prior to the City's 
contract with PRWT. This estimated benefit was 
predicated on the assumption that the City would realize 
$3,811,500 in additional revenue from the Special 
Collections Program. 

In a follow-up report on the PRWT contract issued by the 
Budget Analyst on October 6, 1999, the DPT reported an 
actual net revenue increase of $1,868,086 after the first 
seven months of operation (December of 1998 through 
June of 1999), even without any revenues being realized 
by the City from the Special Collections Program. 
According to Ms. Dawson, at the request of the Board of 
Supervisors, the Department enacted an amnesty 
program beginning in December of 1998 (allowing persons 
with outstanding citations to pay such citations at the 
original fine amount with no additional penalties). The 
amnesty program ended in March of 1999, during Year 1 



6 According to Ms. Dawson, postage for second notices is deducted from additional revenues because 
such costs are new, additional costs under the PRWT contract. Ms. Dawson reports that prior to the 
PRWT contract, DPT did not send out second notices to parking citation recipients. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

86 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



of the PRWT contract, according to Ms. Dawson. Ms. 
Dawson states in the attached memorandum (Attachment 
VII), "As a result, DPT could not implement the special 
collections program until the amnesty period expired and 
all of the amnesty payments were processed. DPT sent 
out its first test collections notices in May 1999, increased 
its number of notices in January 2000, and began sending 
notices in significant number in March 2000." 

As of the writing of this report, as shown in Attachment 
V, the DPT is now reporting that the first year of the 
contract, September 24, 1998 through September 23, 
1999, which included 10 months of operations (December 
of 1998 through September of 1999) actually resulted in a 
net revenue loss to the City of $1,741,334 in contrast to 
the net revenue increase of $1,868,086 during the first 
seven months of operation reported by DPT initially in 
October of 1999. This net revenue loss to the City of 
$1,741,334 includes five months of activity of the Special 
Collections program, which generated $452,639 in net 
revenues from Special Collections alone. Ms. Dawson 
states in Attachment VII, "In October 1999, DPT did not 
have any reports that showed the collection rate on 
citations issued in that year. Instead, DPT estimated the 
contract benefit by comparing the average payment per 
citation before and after contract implementation." Ms. 
Dawson continues, "Using that methodology, DPT 
estimated a $1,868,086 increase in collections over fiscal 
year 1998/99. With the reports available today, DPT can 
accurately track payments on the number of citations 
issued each month and show a true collection rate." 

Over Contract Years 2 through 4, the net revenue gain to 
the City from the additional revenue from the higher 
collection rate and the net revenue from Special 
Collections have far exceeded the results that DPT had 
anticipated in 1998. As shown in Attachment VI, the City 
had a net revenue gain of $11,634,882 during Contract 
Year 2, when only $1,141,560 was originally anticipated, 
$9,696,412 in Contract Year 3, when only $668,220 was 
anticipated, and $11,927,396 in Contract Year 4 when 
$1,071,180 was anticipated. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 
87 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



The Department anticipates that the proposed two year 
contract extension will generate net revenue increases to 
the City of $11,308,512 per year, or a total of $22,617,024. 
Such net revenue estimates are based on PRWT 
processing 2,321,881 citations per year, with an annual 
collection rate of 78 percent. 



5. First Amendment 

According to Ms. Dawson, a First Amendment to the 
PRWT contract was executed on May 11, 2001. The First 
Amendment was not subject to Board of Supervisors 
approval because that modification increased the total 
contract amount by less than $500,000, the minimum 
increase that would require Board of Supervisors 
approval as provided for in the City's Charter Section 
9.118, advises Ms. Angela Karikas of the City Attorney's 
Office. The First Amendment provided for the purchase of 
additional equipment, including handheld ticket writers 
and related software and computer equipment at a total 
cost of $239,170, according to Ms. Dawson. The First 
Amendment also allowed DPT to pay for the cost of 
repairs to damaged equipment that was not covered 
under warranty through the contract. This cost $48,760, 
according to Ms. Dawson. According to Ms. Dawson, the 
additional costs of additional equipment and repairs to 
damaged equipment under the First Amendment did not 
cause an increase in the total not to exceed amount of 
$30,000,000 of the original contract. 



6. Residential Parkins Permit Renewal Program 
Under the proposed Second Amendment, PRWT, through 
Bank of America, would provide lockbox services for 
payments received for the Residential Parking Permit 
Renewal Program, up to 40,000 renewals per year. Such 
services are currently provided by DPT. Ms. Dawson 
explains in the attached memorandum (Attachment VII) 
that "To implement lockbox processing, PRWT would 
change the notices that are sent to individuals renewing 
their permits so that the returned notices could be 
scanned by a computer. Once scanned, the system applies 
the payments to an account automatically. After the 
payments are processed, DPT staff will issue the permits." 
BOARD OF SUPERVISORS 
BUDGET ANALYST 
88 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



Ms. Dawson advises that Residential Parking Permit 
renewal payments currently are manually processed by 
0.33 FTE" 1404 Clerk position. In addition to processing 
the new and renewal Residential Parking Permit 
payments, such DPT staff also are responsible for 
processing the paperwork that accompanies the payment 
for Residential Parking Permit renewals, fulfilling any 
new or renewal permits (which involves putting together 
paperwork and mailing it to the permit recipient), and 
staffing the customer windows where residents go to 
obtain new or renewal permits. PRWT already includes 
notices of outstanding citations in the renewal forms 
mailed to current holders of residential parking permits. 
The cost of such services is included in the fee per citation 
processed. 

7. According to Ms. Dawson, the City's collection of 
parking citation revenue is protected by several 
provisions in the current contract and proposed Second 
Amendment to the current contract with PRWT, 
including: (1) a $500,000 performance bond through the 
term of the contract, (2) in the event of default by the 
primary contractor, PRWT's subcontracts would be 
assigned to the City, thereby ensuring continued 
performance under the contract by the subcontractors, (3) 
in the event that the contract is terminated before the 
term end, the City will have access to the source code for 
the software for the ticket information management 
system and all supporting subsystems, which will be kept 
in escrow throughout the term of the contract, the City 
will have the option of purchasing the hardware, and all 
existing data would be accessible to the City, (4) a 
$5,000,000 fidelity bond in the event of employee or 
corporate theft, and (5) liquidated damages for PRWT's 
failure to meet specified performance standards. 

8. According to Ms. Karikas, the above protections were 
drafted specifically to protect the revenue stream the City 



7 Ms. Dawson advises that this estimate is based on 40,000 Residential Parking Permit renewals 
processed annually, at 1 minute processing time per renewal, or an estimated total of 667 hours per 
year. As a portion of a 2080 hour 1.0 FTE position, the 1404 Clerk position would spend 
approximately 0.33 FTE in this function on an annual basis. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
89 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



receives from parking citations under the proposed 
contract with PRWT. 

9. In April of 1998, the Board of Supervisors approved a 
supplemental appropriation to fund the salary and fringe 
benefits for 48 new PCO positions (43 Parking Control 
Officers and 5 Senior Parking Control Officers) in the 
Department's annual budget. Such action by the Board of 
Supervisors was taken during Year 1 of the City's 
contract with PRWT. The 48 new PCO positions 
represented an increase in PCO staffing of 17.0 percent 
over the prior level of 283 total PCO staff (261 Parking 
Control Officers and 22 Senior Parking Control Officers). 

Ms. Dawson notes that although 48 new PCOs were 
added to DPTs annual budget, most of the additional 
FTEs were originally deployed to traffic control duties, 
and not to general enforcement duties, resulting in a 
decreased number of citations issued in Contract Year 1 of 
2,052,643 when compared to the number of citations 
issued in Fiscal Year 1997-98 of 2,274,000. The number of 
citations issued annually increased from 2,052,643 in 
Contract Year 1 to 2,311,261 in Contract Year 2, an 
increase of 12.6 percent over Contract Year 1, and 
2,440,947 in Contract Year 3, an increase of 18.9 percent 
over Contract Year 1. The Budget Analyst notes that the 
increased number of citations issued in Contract Years 2 
and 3, and thus the increase in total revenue, could be 
attributed at least in part to the additional PCOs added to 
DPTs budget in April of 1998. 

10. Since Fiscal Year 1997-98, revenues generated from 
the collection of parking citation fines have increased. In 
the professional judgement of the Budget Analyst, the 
increase in parking citation revenues collected has 
resulted from at least three factors: (1) the increase of 48 
FTE PCOs in the Department's annual budget and their 
resulting ability to issue additional tickets, (2) the 
increased collection efforts by PRWT which are reflected 
in higher collection rates, and (3) the parking fine 
increases in January of 2002. As shown in Attachment V, 
the DPT was able to estimate the increased revenues 
beginning in Contract Year 4 attributable to the parking 
fine increases in January of 2002. However, the 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

90 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



Department is unable to estimate the increased revenue 
attributable to the additional 48 FTE PCOs, an increase 
of 17.0 percent as noted above, which were added to the 
Department's annual budget during Contract Year 1. 

11. As of the writing of this report, Mr. Bell advises that 
DPT intends to enter into a new Second Amendment with 
PRWT beginning on September 24, 2002 to extend the 
original contract, which terminates on September 23, 
2002, by one month or until the two-year contract 
extension is approved by the Board of Supervisors, 
whichever occurs first. The new Second Amendment is not 
subject to Board of Supervisors approval because this 
modification increases the total contract amount by less 
than $500,000, the minimum increase that would require 
Board of Supervisors approval as provided for in the 
City's Charter Section 9.118, advises Ms. Karikas. The 
Budget Analyst recommends that the proposed resolution 
to approve the two-year contract extension (File 02-1284) 
be amended to refer to a Third Amendment instead of a 
Second Amendment. 

12. The terms of the new Second Amendment are as 
follows: 

(a) DPT would extend the original four-year contract by 
the earlier of October 23, 2002 or the date by which 
the Board of Supervisors approves the proposed Third 
Amendment. Mr. Bell advises that the end date of the 
proposed Third Amendment, September 23, 2004, 
would not change as a result of the Second 
Amendment. 

(b) The not-to-exceed contract amount increases from 
$30,000,000 to $30,499,000 to allow for up to one 
month of service by PRWT. Mr. Bell advises that the 
not-to-exceed amount of the proposed Third 
Amendment, $49,000,000, would not change as a 
result of the Second Amendment. 

(c) The Second Amendment would be subject to the terms 
of the original contract. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

91 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



File 02-1283: PARKING CITATION PROCESSING 
AND COLLECTION SERVICES 
"PROPOSITION J" APPROVAL 



Services to be 
Performed: 



Parking citation processing and collection services. Such 
services would continue to be performed by PRWT under 
the proposed Second Amendment to the City's existing 
contract with PRWT, the subject of File 02-1284. 



Description: 



Charter Section 10.104 provides that the City may 
contract with private firms for services, if the Controller 
determines, and the Board of Supervisors concurs, that 
such services can in fact be performed by private firms at 
a lower cost than similar work performed by City 
employees. 



The Controller has determined that contracting for 
parking citation processing and collection services for FY 
2002-2003 would result in the estimated savings as 
follows: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

92 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 





Lowest 


Highest 




Salary 


Salary 


Citv-Operated Service Costs 


Step 


Step 


Personnel Costs 






Salaries 


$3,071,772 


$3,707,903 


Fringe Benefits 


835.938 


925.858 


Subtotal Personnel Costs 


S3,907,710 


$4,633,761 


Operating Costs 






Materials and Supplies 


$360,000 


$360,000 


Postage 


888,000 


888,000 


Rent 


492.000 


492.000 


Subtotal Operating Costs 


$1,740,000 


$1,740,000 


Data Processing Costs 






System Design & Conversion 


$511,830 


$511,830 


Portable Issuance Units & 






Workstations 


780,167 


780,167 


Computer Hardware & 






Operating Software 


77,857 


77,857 


Technical Support & 






Software Licenses 


332,000 


332.000 


Subtotal Data Processing 






Costs 


$1,701,854 


$1,701,854 


Estimated Total Citv- 






Operated Service Costs 


$7,349,564 


$8,075,614 


Estimated Total Contract 






Costs* 


$7,628,257 


$7,632,688 


Estimated Savings 


($278,693) 


S442.927 



* The Controller's Estimated Total Contract Costs include 
$5,003,980 for citation processing fees, 81,891,818 for special 
collection fees, and $710,088 for postage costs. Such Estimated 
Total Contract Costs include approximately three months, or 
July 1. 2002 through September 23, 2002, of the PRWT 
contract at its existing fee per citation rates and approximately 
nine months, or September 24, 2002 through June 30, 2003, at 
the proposed new fee per citation rates. Therefore, the amounts 
shown in the table above for Estimated Total Contract Costs 
differ from the total $8,903,292 contract costs described under 
Fde 02-0494 which are presented on a contract year basis and 
which also includes equipment repair, equipment purchase and 
BOARD OF SUPERVISORS 
BUDGET ANALYST 
93 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



construction contingency funds. Further, the Estimated Total 
Contract Costs in the Controller's certification include the 
salary and fringe benefits at the lowest and highest salary step 
of a 0.25 FTE 1824 Principal Administrative Analyst position 
at DPT to monitor the contract. 



Comments on 
File 02-1283: 



1. Ms. Dawson reports that the City's current contract for 
parking citation processing and collection services was 
first certified as required by the Charter Section 10.104 in 
1998, the first year of the four-year contract with PRWT. 
However, the DPT has failed to obtain annual 
certification by the Controller since 1998 "because of an 
accidental oversight due to limited resources," states by 
Ms. Dawson in Attachment II. 



Recommendations: 



2. The Controller's supplemental questionnaire with the 
Department's responses is shown in Attachment VIII to 
this report. 

1. As noted above in Comment No. 1, the Budget Analyst 
questioned the not-to-exceed amount of the proposed 
Second Amendment, which is $49,000,000 when, during 
the current and proposed extended contract PRWT will be 
paid an estimated total of $47,159,810. The estimated 
total payment to PRWT already includes $1,600,000 in 
contingency funds for upcoming Caltrans construction 
projects. Therefore, the Budget Analyst recommends that 
Board of Supervisors amend the proposed resolution 
approving the Second Amendment (File 02-1284), and 
instruct the DPT to amend the proposed Second 
Amendment to reduce the not-to-exceed amount of the 
current and proposed extended contract with PRWT by 
$1,800,000, to a not-to-exceed amount of $47,200,000. 

2. Amend the proposed resolution, File 02-1284, on lines 
16, 20 and 24 to refer to a Third Amendment instead of a 
Second Amendment, as noted above in Comment No. 11. 



3. The Budget Analyst considers approval of File 02- 
1284, as amended, to be a policy matter for the Board of 
Supervisors because: 

(a) As noted above in Comment No. 1, of this report, the 
Budget Analyst questioned why the DPT is unable to 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

94 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



set up administrative procedures within the 
Department to perform the necessary tasks to collect 
parking fleet and rental vehicles Special Collections 
parking citation revenues, which could result in 
additional revenues to the City of up to $608,676 in 
Contract Year 5 and up to $638,002 in Contract Year 
Further, the Budget Analyst questioned the 
Department's estimated annual costs of administering 
the fleet and rental vehicles portions of the Special 
Collections Program, 
(b) As noted above in Comment No. 10, of this report, the 
increase in parking citation revenues collected during 
the past four years has resulted from at least three 
factors: (1) the increase of 48 FTE PCOs in the 
Department's annual budget and their resulting 
ability to issue additional tickets, (2) the increased 
collection efforts by PRWT which are reflected in 
higher collection rates, and (3) the parking fine 
increases in January of 2002. The DPT is therefore 
unable to isolate the amount of increased parking 
citation revenues collected over the past four years due 
solely to the City's contract with PRWT and PRWT's 
performance under the contract. 



cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 



4. Approval of File 02-1283, concurring with the 
Controller's certification that automated parking citation 
processing and collections services can continue to be 
practically performed by a private contractor at a lower 
cost than if the work were performed by City employees, 
is a policy decision for the Board of Supervisors because 
its approval is dependent on Board of Supervisors 
approval of File 02-1284. 




Harvey M. Rose 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

95 



AUG. -13' 02(TUE) 14:43 



CITY & CO, OF SF PARKING DEPT. 



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AUG. -22' 02 (THU) 17: 



SAN FRANCI8CO 



CITY k CO. OF SF PARKING DEPT, 



Attachment I- 
Page i of 3 
City and County of San Francisco 




DEPARTMENT OF PAHKINQ 8. TRAFFiC 



WILLIE LEWIS BROWN, JR. .Mayor 

FRED M. HAMDUN, EXECUTIVE DIRECTOR 




Equipment provided by PRWT at beginning of contract 



SAN FRANCISCO PCPS EQUIPMENT LIST 


OTY 


DESCRIPTION 


1 Citation And Hearing Division 1380 Howard Street 


1 


Compaq Prosignia 200 File Server 




233 mhz, 128 ram, (2) 4 gb hd, duplex configuration . - - .... 


. . . 


4/8 gb 4 mm DAT, CPROM 




Netware 4.11 (100 users), Managewise 2.2 




ArcServe 6.1 (Enterprise Edition) 


57 


HP Vectra Pentium 200 Workstations 




200 mhz, 32mb ram 1.6gb hard disk, 3.5" FDD 




15" SVGA Monitor, Intel Pro 10/100 NIC 




Win 95, Wall Data Rumba Office 




Report View client, R&R (or comparable) report writer 




Adjudication Support System Client Software (for hearing examiners) 


11 


Fully configured cashiering workstations 




HP Vectra Pentium 200 mhz, 32 ram, 1.6 gb hd, 3.5" FDD 




15" SVGA Monitor, Intel Pro 10/100 NIC 




Perry 1112 cash Drawer 




Epson 950 receipt printer/check endorser 




Win 95 




Cashiering client software 


5 


HP Laserjet 5M printers 


1 


Cisco 2503 Router 


4 


Bay Network Baystack 24 Port Hub, 1 Base- 


1 


AdtranTlCSUDSU 


1 


Motorola ISDN BRI NT 1 


DPT Administration 25 Van Ness 


4 


HP Vectra Pentium 200 Workstations 




200 mhz, 32ram 1 .6 gb hd, 3.5" FDD 




15" SVGA Monitor, Intel Pro 10/1 00 NIC 




Win 95, Wall Data Rumba Office 




Report View Client R&R report writer 


1 


HP Laserjet 5M printer 


Residential Permit Parking 370 Grove Street 


10 


HP Vectra Pentium 200 Workstations 




200 mhz, 32ram 1 .6 gb hd, 3.5" FDD 




15" SVGA Monitor, Intel Pro 10/100 NIC 




Win 95, Wall Data Rumba Office 



(415] S54-PARK FAX (415) 5S4-9834 



23 Van Nobs Avenu 



C^ulta 



410 



San Francl6co, CA 84102-4576 



AUG. -22' 021THU) 17: 



CITY k CO. OF SF PARKING DEPT. 



Attachment I- 
Page 2 of 3 



PRWT Equipment 



Page 2 



SAN FRANCISCO PCPS EQUIPMENT LIST 


QTY 


DESCRIPTION 




Report View Client R&R report writer 

Adjudication Support System client software (for hearing examiners) 


4 


Fully configured cashiering workstations 

HP Vectra Pentium 200 Processor 200 mhz, 32 ram, 1.6 gb hd, 3.5" FDD 

15" SVGA Monitor, Intel Pro 10/100 NIC 

Perry 1112 cash Drawer 

Epson 950 receipt printer/check endorser 

DB9 to DB25 serial Cable 

WFW 3.11, cashiering client software 


4 


HP Laserjet 5M printer 


Enforcement 505 7" 1 Street 


2 


2 HP Vectra Pentium 200 HRS Base Station 

200 mhz, 32ram, 1.6gb hd, 3.5" FDD 

15" SVGA Monitor, Intel Pro 10/100 NIC 

WN95, 

Handheld Base Station Software client software 


1 HP Laserjet 5M printer 


255 1 Handheld terminal cradles 


255 


Husky FS2 Handheld Terminals 


255 


O'Neill portable printers 


255 


Cables to connect cradles to base station 






Enforcement 2323 Cesar Chavez 


1 


HP Vectra Pentium 200 HRS Base Station 
200 mhz, 32ram, 1.6gb hd, 3.5" FDD 
15" SVGA Monitor, Intel Pro 10/100 NIC 
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1 


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Imaging System 


2 


PC scanning workstations 


2 


Scanners 


1 


File jukebox server 


1 


Image server 



Equipment Purchased during contract term 



33 



33_ 
33. 

33 



Enforcement, 505 7 th Street 



Handheld terminal cradles 



Husky FS2 Handheld Terminals 



O'Neill portable printers 



Cables to connect cradles to base station 



Licensing for ticket issuance software, HH integration software, import export 
module, A/V software module, Sybase SQL server 



Misc supplies (printer spindles, belt mounts, etc.) 



98 



AUG. -22' 02 (THU) 17.08 CITY k CO. OF SF PARKING DEPT. 



TEL: 5549814 



Attachment I- 
Page 3 ot 3 



PRWT Equipment 



Page 3 



Projection for Equipment during contract extension 





Enforcement, 505 7 th Street 


35 


Handheld terminal cradles 


35 


Husky FS2 Handheld Terminals 


35 


O'Neill portable printers 


35 I Cables to connect cradles to base station 




Licensing for ticket issuance software, HH integration software, import export 
module, A/V software module, Sybase SQL server 




Base station 




Misc supplies (printer spindles, belt mounts) 



99 



AUG -19'02(MON) 17:27 CITY It CO. OF SF PARKING DEPT, Attachment II 

Page 1 of 4 
— City and County of San Francisco 



FRANC 




DEPARTMENT OF PARKING &. TRAFFIC 



WILLIE LEWIS BROWN. JR., Mayor 

FRED M. HAMOUN, EXECLTTIVE DIRECTOR 




MEMORANDUM 

To: Harvey M. Rose, Budget Analyst, Board of Supervisors 

From: Julia Dawson, Deputy Director, Administration and Yinzn^s^KU^A^-- 

Through: Fred M. Hamdun, Executive Director (J 

Subject: Questions on PRWT Contract Extension 

Date: August 19,2002 

1) How is citation collection performance directly related to the PRWT contract? 

The PRWT contract has allowed the City to receive more payments on parking citations 
sooner, which ultimately results in higher revenue. For parking citation collections, the 
sooner that the City can notice a citation, the more likely it is to receive a payment for 
that citation. As time passes, it becomes more likely that the vehicle will change 
ownership, making it much more difficult to collect any parking citation written against 
its license plate. 

Since we have entered into the PRWT contact, our payment rate on citations has 
increased from 69% to 78%, resulting in higher collected parking fine revenues. Parking 
and Traffic has not altered the way that it performs enforcement and collection functions 
except for the changes that are a direct result of the PRWT contract. DPT now writes 
about ninety- five percent of its parking citations using electronic handheld ticket writers. 
The electronic tickets are easy to read, survive the weather better than the paper forms, 
and are written more accurately. As a result, electronic tickets axe easier to collect. The 
PRWT processing system has enabled the City to collect on parking citations through 
improved access to name and address from the DMV computer at the time of the initial 
request, quicker, clearer and more frequent noticing, and more reliable placement of 
DMV holds for delinquent citations. In any collection business, the sooner an agency can 
request payment for amounts owed, the more likely it is to collect on its fees. 

2) Why did DPT set a S49 million not to exceed amount in the contract? 

DPT assumed the following additional payments for the S49 million not to exceed 
amount: 

• In first four years of the contract, DPT will spend $29,293,226. 

• $5.28 million in citation processing costs each year, This number builds in some 
flexibility for the potential for higher citation issuance. 

• S660.000 in postage for the first year and 5720,000 in postage for the second year. 
We assumed an increase in the postal rate in the second year. 

• S2. 1 million in special collections payments each year for a total of S4.2 million 

(415) 5S4-PARK FAX (415) 554-9834 25 Van Nesc Avenue, Suite 410 San Francisco, CA 94102-4576 

100 



AUG -19" 02 (MON) 17:28 CITY k CO. OF SF PARKING DEPT. Attachment II 

Page 2 of 4 

Answers to Questions on PRWT Contract Page 2 

• $35,000 each year for new equipment purchases that we would need to make through 
the contract. We have made such purchases over the term of the contract and need to 
build in this ability in the extension. 

• $30,000 each year for repairing damaged items, We derived this amount from our 
actual expenses over the term of the contract. 

■ We added a 1 0% contingency in case we are asked to deploy Parking Control 

Officers for upcoming construction projects, such as the Bay Bridge Retrofit and the 
Central Freeway, and they need additional equipment. This 10% is $1.6 million. 

• The total of all of these figures is S 1 7.9 million for a total contract spending estimate 
amount of S46.9 million over six years. 

• We rounded the not to exceed amount of the contract up to S49 million to include 
purchasing ability for unanticipated events, such as higher issuance and higher special 
collections. All of these increased costs would directly benefit the City because they 
would also generate higher revenues, 

3) What were the modifications in the first contract amendment. Did the 
amendment require the approval of the Board of Supervisors? Why or why not? 

The first contract amendment allowed Parking and Traffic to purchase budgeted 
equipment, such as handheld ticket writers and related software and computer equipment, 
through the contract, It also allowed DPT to pay for the cost of repairs to damaged 
equipment that was not covered under warranty, Because this amendment had little fiscal 
impact, it did not require the approval of the Board of Supervisors. 

4) What criterion does DPT use for designating citations as uncollectable? What 
does PRWT do to collect such citations? 

The special collections program criteria are as follows: 

• Citations returned by mail 

• Out of state unpaid citations 

• Citations rejected by the DMV system. This category includes address requests, hold 
requests, returned requests, no registered owner information 

• DMV holds over one year old 

• Leased or rented vehicles 

• Declaration of non-ownership 

• Fleet vehicles 

PRWT collects on these citations using a variety of methods, including specially 
designed notices, multiple notices, sending notices to other state department of motor 
vehicles, and obtaining addresses from other data sources, such as the post office or other 
public or private agencies. PRWT tracks the effectiveness of all of these strategies, 
choosing which one is most cost effective, PRWT also manages the administrative duties 
of the leased, rented, and fleet vehicle programs. DPT reviews and approves all of the 
collection strategies that PRWT uses, 



101 



AUG. -19' 02 (HON) 17:28 CITY k CO. OF SF PARKING DEPT. Attachment^!! 

Answers to Questions on PRWT Contract Page 3 

Parking and Traffic has not developed collections program criteria for two categories: 
citations returned by mail and declaration of non-ownership. DPT plans to develop these 
additional collections categories in contract year 5 and 6. 

5) Why is DPT projecting a revenue increase for the special collections program in 
contract year 5 and 6? 

DPT is projecting higher revenue in contract years 5 and 6 because it plans to develop 
program criteria and begin to collect on the two collection categories (relumed mail, 
declaration of non-ownership) that were a part of the original contract but were never 
implemented. DPT also expects PRWT to increase the number of rental car companies 
and fleets that participate in those two collections program. 

6) How much parking fine revenue was generated in FY 2001/02? How was the 
revenue allocated? 

Currently, the City's accounting system shows $68,468,717 in parking fine revenue, of 
which S 1 .2 million goes to the Port of San Francisco and the remainder is credited to the 
Municipal Railway. This amount is still being adjusted by our accounting unit and may 
increase before the fiscal year is closed. 

7) What is the total estimated cost of repairs for corrosion of the print heads to the 
handheld ticket printers in total and on a per year basis? 

DPT estimates that the total cost of repairs for corrosion, based on our current level of 
expenditures for such repairs, is SI 0,000 per year. We negotiated a 10% cost increase for 
repairs in the second year. 

8) How many RPP renewals are anticipated to be processed annually? Who 
currently provides RPP renewal services? Will having PRWT provide such services 
result in additional costs or savings to the City? 

DPT estimates that RPP has about 40,000 renewals annually. Currently, DPT employees 
open and process the mail for these renewals. Due to limited staff resources, the RPP 
office frequently falls behind in processing mail, resulting in extending RPP areas and a 
potential loss of revenue from extending permit area renewal periods and suspending 
citation writing on expired permits for that period of time. Lockbox processing of permit 
renewals will improve DPT's ability to send out new permits in a timely manner. 
Increased citation revenues will most likely offset the increased cost for the lockbox 
service. 

9) Has this contract received an annual Prop J certification? If not, why not 

DPT has not submitted this contract for an annual re-certification because of an 
accidental oversight due to limited resources. This contract has been re-certified by the 
Controller and the documentation is a companion item to tins legislation. 



102 



Al'G -19' 02 (MON) 17:28 CITY & CO. OF SF PARKING DEPT. Attachment II 

Page 4 of 4 

Answers to Questions on PRWT Contract Page 4 

10) Why is the cost per citation increasing by 10% in the two-year extension period? 

The cost for the first two million citations remains the same for contract year 5 and 6. 
Processing costs will increase only for citations issued above that threshold. DPT 
negotiated various service improvements, new services, new maintenance requirements, 
and computer replacement parts in the proposed contract extension. All of these 
negotiated improvements will result in increased costs to our vendor. DPT researched the 
percentage increase in the nationwide CPI between 1998 and 2002, which was 10% 
according to the U.S. Department of Labor, Bureau of Labor Statistics Inflation 
Calculator, and proposed to adjust the pricing in the contract by 10 percent for citations 
issued over the 2 million threshold to compensate the vendor for providing additional 
services. Since Parking and Traffic issues 2,2 million citations per year, the increased 
coat is only on citations over the 2 million threshold, which is a small percentage of our 
overall issuance. 






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AUG. -23' 02 (FRI ) 09:52 CITY k CO. OF SF PARKING DEPT. Attachment III-C 

City and County of San "Francisco 



F R «. N C I G C O 




DEPARTMENT OF PARKING & TRAFFIC 



WILLIE LEWIS BROWN, JR., Mayor 

FRED M. hAMDUN. EXECUTIVE DIRECTOR 




MEMORANDUM 

To: Harvey M. Rose, Budget Analyst, Board of Supervisors 

From: Julia Dawson, Deputy Director, Administration and Finangf^-^yi-<_ - 

Through: Fred M. Hamdun, Executive Director ^ 

Subject: Special Collections 

Date: August 23, 2002 

1) Why were fleet and rental vehicles assigned as a special collection? 

DPT has designated a variety of types of citations that require special effort or collection 
strategies to be more effective and produce additional revenue for the City. In the interest 
of expanding participation in certain specialized collection programs that require 
additional administrative effort and analysis, Parking and Traffic assigned rental citations 
in January 2001 and the fleet program in January 2002. 

Maintaining an effective collection effort on rental and fleet vehicles requires additional 
administrative and programming effort. For the fleet program, PRWT must recruit new 
companies to participate. Without belonging to the fleet program, each citation is noticed 
individually, making it less likely that it will be collected. Each company assigns specific 
vehicles to participate in the program, which must be entered into the system and updated 
continuously as the fleet changes, As a result of their participation, each company 
receives a monthly invoice that combines all of the citations issued to each participating 
plate. Every month, these bills need to be analyzed and adjusted for discrepancies 
between the City's and the company's records. For the rental vehicle program, 
recruitment of new companies is also vital, because without information from the rental 
car companies, the citations are not collectable. Each rental car company receives a 
monthly download of records for vehicles in its fleet that were issued citations. After 
reviewing these records, PRWT must reconcile and enter the rental customer for each 
vehicle so that they can be noticed for the citation. To be effective, both of these 
programs require continuous, consistent and effective administration, maintenance of 
records, software modifications and enhancements, and detailed updating of records in 
the citation processing system. 

Parking and Traffic has not historically maintained these types of programs on a large 
scale and did not have the staff resources to market the program and increase the 
collection on these types of citations. One of the goals of the PRWT contract was to 



(41S) 334-PARK FAX (413) 054-9834 2 5 Van New Avenue. Suite 410 San Francisco. CA 94102^576 



AUG. -23' 02 (FRI ) 09:53 CITY & CO. OF SF PARKING DEPT. Attachment Ill- 

Page 2 of 2 

Special Collections Assignments Page 2 

improve service while also improving collections. The assignment of these programs as 
collection accounts was one way of accomplishing this goal. If PRWT is nol successful at 
increasing participation and collections in these pre grams, DPT can remove them from 
the collection program, 



(415J554-PARK FAX (415) 554-9834 28 Van N.„ Avanua. Suit. 410 San Fr.ncl.co CA 

107 



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CITY k CO. OF SF PARKING DEPT. 



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29 CITY k CO. OF SF PARKING DEPT. Attachment VII 

Page 1 of 2 
City and County of San Francisco 




DEPARTMENT OF PARKINO & TRAFFIC 



WILLIE LEWIS BROWN, JR„ Mayor 

FRED M. HAMDUN. EXECUTIVE DIRECTOR 




MEMORANDUM 

To: Harvey Rose, Budget Analyst 

From: Julia Dawson, Deputy Director, Administration and Finance/-^*' ]/\ja^- 

Through; Fred M. Hamdun, Executive Director \J 

Subject: Additional Information Requested on PRWT contract 

Date: August 19,2002 

1) Why did the PRWT contract show a loss in the first year of operation? 

The Board of Supervisors requested that Parking and Traffic offer an amnesty program as 
it implemented the new parking citation collection system. This amnesty program was 
meant to allow individuals with older tickets to pay them at the original fine amount 
before the citations would be assigned to the special collections program. As a result, 
DPT could not implement the special collections program until the amnesty period 
expired and all of the amnesty payments were processed. DPT sent out its first test 
collections notices in May 1999, increased its number of notices in January 2000, and 
began sending notices in significant number in March 2000. The delay moved the 
financial benefits of collections program into the second and third contract years. 

2) Why did DPT report a net revenue increase for the first seven months of the 
contract (Dec 1998 through June 1999) in October 1999 of 51,868,086 and is now 
reporting a loss of SI. 7 million in the first year of the contract? 

In October 1 999, DPT did not have any reports that showed the collection rate on 
citations issued in that year. Instead, DPT estimated the contract benefit by comparing the 
average payment per citation before and after contract implementation. DPT compared 
actual parking fine revenue collected in FY 1998/99, 556,634,262, and subtracted the 
amount it estimated that the City would have collected using an average amount collected 
per citation (S23.4 per citation multiplied by 2,40,281 citations = 52,422,575). Using that 
methodology, DPT estimated a $1,868,086 million increase in collections over fiscal year 
1998/99. With the reports available today, DPT can accurately track payments on the 
number of citations issued each month and show a true collection rate. 



(415) 554-PARK FAX (415) 554-9834 25 Van Noss Averujs, .Suite 410 San Francisco, CA 94102-4576 



MIC -19- OMMON) 17:29 CITY k CO. OF SF PARKING DEPT. TEL:5549814 Attachment VII 

nuu. i3 \ page 2 or Z 

Answers to Questions on PRWT Page 2 

3) What are the benefits of lockbox services for Residential Permit Parking? 

In the extension to the agreement with PRWT Services, DPT is proposing to add lockbox 
services for renewals of residential parking permits. Currently, DPT employees manually 
process each RPP renewal payment by opening each envelope, verifying the information 
submitted by the public, and processing the check using the cashiering system. Because 
of the varying size and number of permits in each residential permit area, some 
processing months are so busy that the 14 full-time program staff cannot process these 
payments in a timely manner. The processing delays encourage people to renew in 
person, which forces DPT to reassign clerks from mail processing to handling in-person 
transactions. At least six times a year, DPT is forced to delay enforcement for a permit 
area for at least one month so the staff can process the mail, resulting in lost citation 
revenue because old permits are still valid. DPT cannot quantify these losses because it 
cannot measure how many citations may not have been written because of delayed permit 
processing. 

To implement lockbox processing, PRWT would change the notices that are sent to 
individuals renewing their permits so that the relumed notices could be scanned by a 
computer, Once scanned, the system applies the payments to an account automatically. 
After the payments are processed, DPT staff will issue the permits. These payment 
changes will benefit the public because they will not need to visit the RPP offices to 
ensure that they have a valid and current permit. With the improved service, enforcement 
officers will not need to honor expired permits, ensuring more available parking for 
residents. 



(41S)554-PARK FAX (41 5) 354-9B34 25 Van N MS Avanue, SullB 410 San Francisco C^ 

112 



Attachment VIII 

CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

DEPARTMENT: Parking and Traffic 

CONTRACT SERVICES: Automated Parking Citation Processing and Collections Sys tem 

CONTRACT PERIOD: Two years from contract amendment approval 

(1) Who performed the activity/service prior to contracting out? 

Existing Contract was awarded by the Board of Supervisors and commenced September 24, 1998 for four 
years. Prior to that it was performed by the Trial Court Computer Information Services Group. 

(2) How many City employees were laid off as a result of contracting out? 

No City employees will be, or have been, laid off as a result of this contract. 

(3) Explain the disposition of employees if they were not laid off. 
N/A 

(4) What percentage of City employees' time is spent of services to be contracted out? 
N/A 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contracting out? 

This service has been contracted out for the last four years. This will likely be an on-going request for 
contracting out but will be analyzed in detail prior to any new award. 

(6) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent 
year? 

The First year was 1998 when four-year contract was approved by the Board of Supervisors. It was not 
certified for each subsequent year. 

(7) How will the services meet the goals of your MBE7WBE Action Plan? 

The contract meets the department's MBE7WBE action plan and was certified by HRC. 

(8) Does the proposed contractor provide health insurance for its employees? 
Yes 

(9) Does the proposed contractor provide benefits to employees with spouses? If so, are the same benefits 
provided to employees with domestic partners? If not, how does the proposed contractor comply with the 
Domestic Partners ordinance? 

Yes to both questions. 

(10) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 
Yes 

Department Representative: _Steve Bell 



Telephone Number: 554-9825 

1 1 3 




City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 
Clerk: Gail Johnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, October 02, 2002 



12:30 PM 
Regular Meeting 



City Hall, Room 263 



Members Present: Aaron Peskin, Chris Daly, Sophie Maxwell. 



MEETING CONVENED 



The meeting convened at J 2:40 p.m. 



Note: The Chair intends to entertain a motion to continue consideration of the following item. 
File 021315, to the October 9, 2002, meeting: 



021315 [Contracting out Janitorial Services] 

Resolution concurring with the Controller's Certification that janitorial services can be practically performed at 

the Asian Art Museum under private contract at a lesser cost than similar work performed by employees of the 

City and County. (Asian Arts Commission) 

7/29/02, RECEIVED AND ASSIGNED to Finance Committee. 

8/21/02, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Dr. Emily Sano, Director, Asian Art Museum; 

Monique Zmuda. Deputy Controller; Linus Black; Rebecca Miller, SEIU, Local 790; Andre Spearmon, SEIU. Local 790; Ben Rosenfield, 

Mayor's Budget Office. 

Continued to 9/25/02. 

9/25/02, CONTINUED. Speakers: None. 

Continued to 10/2/02. 

Speakers: None. 
Continued to 10/9/02. 
CONTINUED by the following vote: 

Ayes; 3 - Peskin, Daly, Maxwell 






City and County of San Francisco 



Printed at 11:44 AM on 3 .i 1)4 



Finance Committee Meeting Minutes October 2, 2002 



021291 | Accept-Expend Federal Grant] 

Resolution authorizing the Airport Commission to accept and expend a Federal Airport Improvement Program 
grant in the amount of $5,291,558.00 from the U.S. Department of Transportation Federal Aviation 
Administration, and approving Modification Nos. 4 and 5 to Contract No. 4240.1 for preparation of 
environmental impact studies for the proposed runway reconfiguration project, for a total contract amount not 
to exceed $19,741,558. (Airport Commission) 

(Public Benefit Recipient.) 

7/24/02, RECEIVED AND ASSIGNED to Finance Committee. 

9/25/02, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Stuart Sunshine, Airport; Eileen Bogan, SPEAK; 

Amy Quark, Alliance for a Clean Waterfront. 

Continued to 10/2/02. 

Heard in Committee. Speaker: Stuart Sunshine. Airport. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Resolution authorizing the Airport Commission to accept and expend a Federal Airport Improvement Program 
grant in the amount of $5,291,558.00 from the U.S. Department of Transportation Federal Aviation 
Administration, and approving Modification Nos. 4 and 5 to Contract No. 4240.1 for preparation of 
environmental impact studies for the proposed runway reconfiguration project, for a total contract amount not 
to exceed $16,200,730. (Airport Commission) 

(Public Benefit Recipient.) 

(Supervisor Daly dissenting in Committee) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Noes: 1 - Daly 



City and County of San Francisco 2 Printed at 1 1 :44 AM on 3/3/04 



Finance Committee Meeting Minutes October 2, 2002 



021611 [Actions being implemented by the Mayor's Office to minimize the current year's (2002-03) budget 
deficit] 
Supervisor Peskin 

Hearing regarding actions being implemented by the Mayor's Office to minimize the current year's (2002-03) 
budget deficit, including the postponement of certain previously approved programs. 
9/23/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Ben Rosenfield, Mayor's Budget Office; Yvonne Mere; Female Speaker; 
Kevin Hickey, Jewish Vocational Services; John Avalos, Coleman Advocates for Children and Youth; Jill Fox; 
Margaret Brodkin, Director, Coleman Advocates for Children and Youth; Anita Moran, San Francisco Child 
Abuse Prevention Center; Male Speaker; NTanya Lee, Coleman Advocates for Children and Youth; Jill 
Pfeiffer, Oasis; Troy Arnold, Health Initiatives for Youth (HIFY); Linda As ato, Wu Yee Children's Services; 
Gaylon Logan, Jr., Executive Director, Infusion-One; Mai-Mai Ho, Asian Perinatal Advocates; Eric Mar, San 
Francisco Board of Education; Neil Gendel, Healthy Children Organizing Project; Julie Kavanagh, 
Visitacion Valley Community Center; Russell Murphy, President, Mission Youth Soccer League; Jim Richards, 
Boys and Girls Clubs, San Francisco; Andrew Scott, YMCA, Mission Branch; Hilary Weheitz (speaking on 
behalf of Teresa Gallegos), Coleman Advocates for Children and Youth; Mauricio Vela, Bernal Heights 
Neighborhood Center; Carlos Serrano-Quan, Community Youth Center (CYC); Maria Gustory; Rebecca 
Vilkomerson, Homeless Prenatal Program, Peoples Budget; Margaret Libby, Youth Leadership Institute; 
Emily Drebrow, Huckleberry Youth Programs, Children's Fund Citizens Advisory Committee; Hydra 
Mendoza, Executive Director, Parents for Public Schools; Jana S.; Cynthia Williams, Executive Director, 
Whitney Young Child Development Center; Sandra Fewer; Commissioner Tanene Allison, Chair, Youth 
Commission; Barbara Bell, Social Worker, Hearing Society; Rosa Pascual; Voss Luis Pavon, Coleman 
Advocates for Children and Youth; Salle Hopkins, SoMA Partnership; Joe Wilson, Coleman Advocates for 
Children and Youth; Brenda Lopez, Director, Department of Children, Youth and Their Families. 
Continued to 11/13/02. 
CONTINUED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 3 Printed at 1 1:4$ AM on 3/3/04 



Finance Committee Meeting Minutes October 2, 2002 



021354 (Special Funds - Children's Fund and Open Space Fund] 
Supervisor Peskin 

Hearing to address the Mayor's Office use of the special funds like the Children's Fund and Open Space Fund 
to balance the fiscal year 2002-03 Budget. The hearing will address how revenues for these funds can be better 
projected; and how the City can assure the public that these funds will not be used for such purposes again. 
7/29/02, RECEIVED AND ASSIGNED to Budget Committee. 
8/14/02, TRANSFERRED to Finance Committee. Request to transfer made by sponsor. 

Heard in Committee. Speakers: Ben Rosenfield, Mayor's Budget Office; Yvonne Mere; Female Speaker; 
Kevin Hickey, Jewish Vocational Senices; John Avalos, Coleman Advocates for Children and Youth; Jill Fox; 
Margaret Brodkin, Director, Coleman Advocates for Children and Youth; Anita Moran, San Francisco Child 
Abuse Prevention Center; Male Speaker; NTanya Lee, Coleman Advocates for Children and Youth; Jill 
Pfeiffer, Oasis; Troy Arnold, Health Initiatives for Youth (HIFY); Linda Asato, Wu Yee Children's Services; 
Gaylon Logan, Jr., Executive Director, Infusion-One; Mai-Mai Ho, Asian Perinatal Advocates; Eric Mar, San 
Francisco Board of Education; Neil Gendel, Healthy Children Organizing Project; Julie Kavanagh, 
Visitacion Valley Community Center; Russell Murphy, President, Mission Youth Soccer League; Jim Richards, 
Boys and Girls Clubs, San Francisco; Andrew Scott, YMCA, Mission Branch; Hilary Weheitz (speaking on 
behalf of Teresa Gallegos), Coleman Advocates for Children and Youth; Mauricio Vela, Bernal Heights 
Neighborhood Center; Carlos Serrano-Quan, Community Youth Center (CYC); Maria Gustoty; Rebecca 
Vilkomerson, Homeless Prenatal Program, Peoples Budget; Margaret Libby, Youth Leadership Institute; 
Emily Drebrow, Huckleberry Youth Programs, Children's Fund Citizens Advisory! Committee; Hydra 
Mendoza, Executive Director, Parents for Public Schools; Jana S.; Cynthia Williams, Executive Director, 
Whitney Young Child Development Center; Sandra Fewer; Commissioner Tanene Allison, Chair, Youth 
Commission; Barbara Bell, Social Worker, Hearing Society; Rosa Pascual; Voss Luis Pavon, Coleman 
Advocates for Children and Youth; Salle Hopkins, SoMA Partnership; Joe Wilson, Coleman Advocates for 
Children and Youth; Brenda Lopez, Director, Department of Children, Youth and Their Families. 
Continued to 11/13/02. 
CONTINUED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021219 [Tax Penalty Amnesty Program] 
Supervisor McGoldrick 

Ordinance amending the San Francisco Business and Tax Regulations Code to: (i) amend Article 17 thereof to 

establish a two month business tax penalty amnesty program during the 2002 - 2003 fiscal year, and (ii) amend 

Article 6 thereof to increase penalties for failing to pay taxes, underreporting of taxes, failing to file a tax return 

and failing to obtain a business registration certificate. 

7/8/02, RECEIVED AND ASSIGNED to Finance Committee. (7/1 6/02 - Referred to Small Business Commission for comment and 

recommendation.) 

Speakers: None. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Peskin, Maxwell 
Absent: 1 - Daly 



City and County of San Francisco 4 Printed at 11:45 AM on 3/3/04 



Finance Committee 



Meeting Minutes 



October 2, 2002 



021417 [Eliminating the Mayor's Office Cash Revolving Fund] 
Mayor 

Ordinance amending the San Francisco Administrative Code by repealing Section 10.148, to eliminate the 

Mayor's Office cash revolving fund. (Mayor) 

8/12/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 

RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021526 [New Mission Bay Branch Library] 
Mayor 

Ordinance approving and authorizing the Director of Property to execute an Agreement of Purchase and Sale 
of Real Property with the Redevelopment Agency of the City and County of San Francisco for the purchase of 
a new Mission Bay Branch Library of the San Francisco Public Library to be constructed and located on land 
that is referred to herein as Parcel N3a-1 fronting on 4th Street between Berry Street and the Mission Creek 
Channel within the Mission Bay North Redevelopment Plan Area; and authorizing the Director of Property to 
execute documents, make certain modifications and take certain actions in furtherance of this Ordinance. 
(Mayor) 

(Fiscal impact.) 

8/26/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Hildreth, City Librarian; Marcia Rosen. 

Executive Director, Redevelopment Agency; Marilyn Thompson, Project Manager, Public Library. 

Amended on page 6, line 14, after "the, " by adding "Subject to the provisions of Section below. " Further 

amended on page 7, line 4, by adding the following: 

"Section 4. The foregoing notwithstanding, the Director of Property shall not sign the Agreement unless 
and until the appropriate provisions of the Agreement and its exhibits are modified to provide that in the event 
the City elects to terminate the Agreement because the Purchase Price adjusted as described in Section l.J 
above exceeds 53,430,350, the City may terminate the Agreement by paying the Agency's actual costs for 
redesigning the Library Parcel for another use up to an amount not to exceed what the Agency has incurred 
for the design of the library improvements to the Library Parcel up to the date of termination, which City 
payment together with the amount incurred by the Agency shall not exceed $600,000.00. 

"Section 5. In the event that the Purchase Price, adjusted as described in Section l.J above, exceeds 
$3,430,350, the City shall not proceed to purchase the Library Parcel without further approval from the 
Board ofSupen'isors. " 
AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



ADJOURNMENT 



The meeting adjourned at 3:28 p.m. 



City and County of San Francisco 



Printed at 11:45 M/ on .; >' 04 



'Hi. 



CITY AND COUNTY 




[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



OF SAN FRANCISCO 



J30ARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



September 26, 2002 



TO: ^Finance Committee 

FROM: /^Budget Analyst 

SUBJECT: October 2, 2002 Finance Committee Meeting 

Item 1 - File 02-1315 



DOCUMENTS DEPT. 
OCT 1 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



Note: This item was continued from the September 25, 2002 Finance Committee 
Meeting. 



Department: 
Item: 



Services to be 
Performed: 

Description: 



Asian Art Museum 

Resolution concurring with the Controller's certification 
that janitorial services at the Asian Art Museum can be 
practically performed by a private contract at a lower cost 
than similar work services performed bj" City and County 

employees. 

Janitorial services at the Asian Art Museum 

Charter Section 10.104 provides that the City may 
contract with private firms for services that can be 
practically performed for a lower cost than similar work 
performed by City employees. 

The Controller has determined that contracting for 
janitorial services at the Asian Art Museum for FY 2002- 
03 would result in estimated savings as follows: 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



Comments: 





Lowest 


Highest 




Salary 


Salary- 


Citv-Operated Service Costs 


Step 


Step 


Salaries 


$441,559 


$522,290 


Fringe Benefits 


138,536 


151,227 


Equipment 


10,284 


10,284 


Total 


$590,379 


$683,801 


Contractual Services Cost* 


(372,527) 


(372.921) 


Estimated Savings 


$217,852 


$310,880 



* The Contractual Services Cost difference is due to the inclusion of 
City contract monitoring costs at the lowest and highest salary steps. 

1. The Asian Art Museum closed its operations at its 
Golden Gate Park facility on October 7, 2001 and will 
reopen at its new Civic Center facility in January of 2003. 
In the past, the M.H. de Young Museum and the Asian 
Art Museum used to be located in the same building in 
Golden Gate Park. Janitorial services for the shared 
portions of the Golden Gate Park facility, including the 
entry way and the restrooms, were provided by 2.0 FTE 
2708 Custodian positions and funded in the Fine Arts 
Museum budget. Mr. Steve Dykes of the Fine Arts 
Museum reports that the 2.0 FTE 2708 Custodian 
positions that provided janitorial services for the shared 
portions of the Golden Gate Park facility continue to be 
included in the Fine Arts Museum budget. Mr. Dykes 
further reports that these two positions currently provide 
janitorial services at the Palace of the Legion of Honor. 

In addition to the 2.0 FTE 2708 Custodian positions 
included in the Fine Arts Museum budget, for the past 
nine years, the Asian Art Museum Foundation has paid 
approximately $55,000 per year for a janitorial services 
contract for the upkeep of the Asian Art Museum exhibit 
space and administrative offices at the Golden Gate Park 
facility, according to Ms. Ikuko Satoda of the Asian Art 
Museum. According to Ms. Satoda, the janitorial services 
contract for upkeep of Asian Art Museum space at the 
Golden Gate Park facility, paid for by the Asian Art 
Museum Foundation, was terminated when the Asian Art 
Museum closed its operations at its Golden Gate Park 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



facility in October of 2001. In the attached memorandum 
(Attachment I), Ms. Satoda provides additional 
information on the provision of custodial services at the 
Asian Art Museum. 

Ms. Satoda advises that the janitorial services contract for 
upkeep of the Museum's new Civic Center facility is 
anticipated to begin on November 1, 2002. Therefore, the 
Fiscal Year 2002-03 Asian Art Museum budget includes 
funding of $247,000 for eight months of a janitorial 
services contract. 

2. The Contractual Services Cost used for the purpose of 
the analysis is based on (a) the Asian Art Museum's 
estimated FY 2002-03 costs to provide janitorial services 
for a full 12 months based on the associated workload at 
the new Civic Center facility and the industry standards 
for the cost of providing such janitorial services, and (b) 
the salary and fringe benefits at the lowest and highest 
salary steps of 0.25 FTE 7120 Buildings and Grounds 
Maintenance position at the Asian Art Museum to 
monitor the contract. 

3. According to Ms. Emily Sano of the Asian Art Museum, 
the Department would issue a Request for Proposals 
(RFP) for the Asian Art Museum's janitorial services 
contract immediately upon approval of the subject 
resolution. 

4. Attachment II, provided by the Asian Art Museum, 
is the Controller's supplemental questionnaire, with the 
responses from the Asian Art Museum. 

5. The Budget Analyst notes that a supplemental 
appropriation ordinance for $490,889 (File 02-1507), 
which is $117,968 or 31.6 percent more then the proposed 
contract amount of $372,921 included in the Controller's 
certification, and a companion Salary Ordinance (File 02- 
1529) to fund the creation of ten new in-house Civil 
Service custodian positions for the Asian Art Museum are 
currently pending in the Finance Committee. This 
$490,000 pending supplemental appropriation includes 
$247,000 to be reappropriated from the existing FY 2002- 
03 Asian Art Museum's budget for the subject janitorial 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 

services contract and $243,889 of additional General 
Fund monies. Therefore, the Budget Analyst recommends 
that the proposed resolution (File 02-1315), to approve the 
Controller's certification that janitorial services at the 
Asian Art Museum can be performed at a lower cost by a 
private contractor, should be continued in order to be 
heard by the Finance Committee at the same time as the 
pending supplemental appropriation and Salary 
Ordinance are heard. 

Recommendation: Continue the proposed resolution to the Call of the Chair, 

pending the scheduling of the supplemental appropriation 
(File 02-1507) and Salary Ordinance (File 02-1529) that 
would create and fund in-house custodian positions for 
the Asian Art Museum instead of contracting out for such 
services. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Attachment I 



Asian Art Museum of San Francisco 
Memorandum 



TO: Anna LaForte, Budget Analyst Office 

FROM: Ikuko Satoda, Asian Art Museum 

DATE: August 13, 2002 

Re: Custodial Services 



This memo is in response to your question regarding the City's responsibility in 
maint ainin g the City's new building. Asian Art Museum. 

For its entire existence the Asian Art Museum has relied on the promise of the City 
Charter (Sec. 16.106) to maintain the integrity of the Museum and its collections. For 
most of our history, the City contribution to security, custodial and building maintenance 
was part of the Fine Arts Museums' budget and to be performed by civil service 
employees. Nine years ago, due to the budget reduction and a dminis trative oversight, the 
funds for services provided to FAM by the City were significantly reduced, and one 
custodial position for the AAM was e limi nated. In order to maintain the building at 
Golden Gate Park at an acceptable level, the Asian Art Foundation has been 
supplementing the custodial services by engaging outside janitorial services for several 
years. 

Since we are opening a newly renovated facility, which has been paid for largely with 
private funds as a gift to the City and County of San Francisco, we were assured 
continuing City support to resume the responsibility of maintaining the City's brand new 
building by appropriating the costs of custodial services again to the Asian .Art Museum. 



Attachment II 
CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

DEPARTMENT: Asian Art Museum 



CONTRACT SERVICES: _Janitorial Services. 
CONTRACT FERIOD: One Year 



(1 ) Who performed the activity/service prior to contracting out? 
N/A since the facility is brand new. 

[2] How many City employees were laid off as a result of contracting out? 
None 

(2) Explain the disposition of employees if they were net laid off. 
N/A 

(4) What percentage of City employees' time is spent of sen/ices to be contracted out? 
N/A 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contracting out? 

Never up to now. It will be ongoing raquesb 

(5) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent 
year? 

FY 02-C3 will be the first year. 
(7) How will the services meet the goals of your MBE/WBE Action Plan? 

Meat MEE requirement. 

(3) Does the proposed contractor provide health insurance for its employees? 
Assumed "yes" since the vendor is on the City approved list. 

(9) Does the proposed contractor provide benefits to employees with spouses? If so, are the same benefits 
provided to employees with domestic partners? If not, how does the proposed contractor comply with this 
Domestic Partners ordinance? 

Assumed "yes" since the vendor is on the City approved list. 

(10) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 

Assumed "yes" sines the vendor is on the City approved list, 

Department Representative: Itcukc Saiac'a 

Telephone Number: 415-557-6812 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 

Item 2 -File 02-1291 

Note: This item was continued by the Finance Committee at its meeting of 
September 25, 2002. 



Department: 
Item: 



Grant Amount: 
Grant Period: 

Source of Funds: 



Required Match: 
Indirect Costs: 
Description: 



Airport 

Resolution authorizing the Airport Commission to accept 
and expend a Federal Aviation Administration's Airport 
Improvement Program grant in the amount of 
$5,291,558.00 from the U.S. Department of 
Transportation Federal Aviation Administration. The 
proposed resolution would also approve Contract 
Modification Nos. 4 and 5 to Contract No. 4240.1 with 
URS Corporation for preparation of environmental impact 
studies for the Airport's proposed runway reconfiguration 
project, increasing the current contract amount of 
$11,800,000 by $7,941,558, including the subject grant of 
$5,291,558, and $2,650,000 from the Airport's FY 2002- 
2003 capital budget, for a total contract amount not to 
exceed $19,741,558. 

$5,291,558 

June, 2002 through June, 2004 (two years). 

U.S. Department of Transportation Federal Aviation 
Administration (FAA) Airport Improvement Program 
(AIP) 

$1,763,853, funded from the Airport's FY 2002-2003 
capital budget. 

Indirect costs have not been budgeted in order to 
maximize the funding available for contracted services. 

The proposed resolution would authorize the Airport 
Commission to accept and expend a Federal Aviation 
Administration (FAA) Airport Improvement Program 
(AIP) grant in the amount of $5,291,558. On April 18, 
2002, the Airport was awarded an AIP grant in the 
amount of $5,291,558 for the Airport's runway 
reconfiguration project. The Airport Commission accepted 
the AIP grant funds on April 29, 2002. 

The proposed resolution would also approve Modification 
No. 4 in the amount of $2,650,000 from existing Airport 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



capital funds and Modification No. 5 in the amount of 
$5,291,558 from the proposed grant funds to be added to 
the existing contract with URS Corporation (formerly 
URS Greiner-Woodward Clyde) for the preparation of the 
Environmental Impact Statement (EIS) and 
Environmental Impact Report (EIR) for the Airport's 
proposed runway reconfiguration project. Attachment I, 
provided by the Airport, describes the Airport's runway 
reconfiguration project. The EIS/EIR process to be 
completed by URS Corporation (URS) was divided into 
three phases: (i) Phase 1 consists of project planning, 
coordination with Federal agencies, description of 
baseline environmental conditions, and preliminary 
environmental analysis; (ii) Phase 2 consists of completion 
of technical studies and coordination of public 
involvement necessary for the EIS/EIR, preparation of a 
draft EIS/EIR, and preliminary public review of the draft 
EIS/EIR; and (hi) Phase 3 consists of a detailed review of 
comments on the EIS/EIR, development of responses to 
comments, and preparation of the final EIS/EIR and 
supporting documents. 

The original contract award to URS of $1,100,000, 
effective August 1, 1999, funded only the initial portion of 
Phase 1. The scope of work and schedule of payments 
have since been modified three times by the Airport 
Commission, adding the amounts of $5,200,000, 
$5,000,000, and $500,000, respectively, for a total contract 
addition of $10,700,000. The existing contract, as 
modified, is for a total not to exceed the amount of 
$11,800,000, and is for work including all of Phase 1 and 
a portion of Phase 2 (see Comment No. 1). 

According to Mr. Greg Lyman of the Airport, total 
payments to date on the current URS contract amount of 
$11,800,000 are $11,798,150. Including this proposed 
subject grant of $5,291,558 and $2,650,00 from the 
Airport's FY 2002-2003 capital budget, the total 
authorized funds for the URS contract would be 
$19,741,558. Mr. Kevin Kone of the Airport reports that 
the source of funds for the contract payments of 
$11,798,150 was Commercial Paper proceeds used to fund 
the Airport's capital budget appropriations during FYs 
1999-2000, 2000-2001 and 2001-2002. Mr. Kone further 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

8 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



reports that the $4.50 Passenger Facility Charge (PFC) 
can be used for eligible costs up to $113,358,139 for 
studies associated with potential runway reconfiguration 
and for payment of debt service associated with 
expenditures related to the potential runway 
reconfiguration project. The Finance Committee of the 
Board of Supervisors previously approved the release of 
$41,893,072 in PFC funds, including $11,149,353 in costs 
for the URS contract eligible for PFC reimbursement (File 
02-0473). 

Attachment II, provided by the Airport, provides details 
on the $19,741,558 source of funds for the URS contract, 
including (a) the original contract ($1,100,000), (b) the 
three previous contract modifications ($10,700,000) and 
(c) the proposed Modifications No. 4 and No. 5 
($7,941,558). 

The proposed two contract modifications totaling 
$7,941,558 would increase the scope of work of the 
contract to include the completion of Phase 2, including 
the following: 

• preparation of technical reports detailing analysis 
conducted under the existing contract; 

• environmental analyses of Irydrodynamics, sediment 
transport, water quality, biology, noise, air quality and 
surface transportation; 

• preparation of technical reports summarizing these 
new analyses; and 

• preparation of the Draft EIS and Draft EIR. 

Modification No. 4 would increase the maximum amount 
of the contract by $2,650,000, to a new total contract 
amount of $14,450,000, to be initially funded from the 
Airport's FY 2002-2003 capital budget. Modification No. 5 
would increase the maximum amount of the contract by 
an additional $5,291,558, to be initially funded from the 
Airport's future capital budgets and reimbursed by the 
subject grant funds. Together, the two proposed 
modifications would increase the maximum amount of the 
contract by $7,941,558, from $11,800,000 to $19,741,558. 
In addition, Modification No. 4 would extend the term of 
the agreement upon approval by the Board of Supervisors 
to June 30, 2005. Therefore, the contract would have a 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

9 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

total term from its original inception of August 1, 1999 of 
five years and eleven months. In addition, Modification 
No. 4 requires the contractor to comply with current City 
and Federal regulations and updates language to reflect 
the current titles of the parties involved. 

The FAA's AIP reimburses Airports for up to 75 percent of 
the costs of eligible airport improvements and planning 
for such improvements, and requires grantee Airports to 
provide a 25 percent match. Therefore, the FAA grant of 
$5,291,558 requires the Airport to provide $1,763,853 in 
matching funds. According to Mr. Lyman, under the 
Airport's agreement with the FAA, these expenditures 
totaling $7,055,411 ($5,291,558 plus $1,763,853) must be 
used for grant-eligible expenses, but may be expended 
retroactively on related work completed under the 
existing contract. Of the $7,055,411 in grant funds and 
Airport matching funds budgeted, a total of $6,505,340 
would be expended on grant-eligible tasks under 
Modifications No. 4 and No. 5. The remaining $550,071, 
which includes $412,553 in FAA grant money and 
$137,518 in Airport matching funds, would be expended 
retroactively on eligible costs included in the existing 
URS contract of $11,800,000. 

Modification Nos. 4 and 5, totaling $7,941,558 less the 
grant eligible amount noted above of $6,505,340 result in 
a balance of $1,436,218, which, according to Mr. Lyman, 
is not eligible for FAA grant funds because (a) $1,110,400 
would be expended on tasks solely related to the 
preparation of the EIR in compliance with State of 
California regulations, which the Federal grant will not 
pay for; and (b) $325,818 would be expended on tasks that 
were included in the modifications after the grant 
proposal had already been submitted and therefore, are 
not eligible for the grant funds. Mr. Lyman explains that 
the $325,818 in additional costs to complete Phase II 
reflects a combination of changes in the scope of work 
necessary to complete a satisfactory EIS/EIR as well as 
increases in projections of the time necessary to complete 
tasks already included in the scope of work necessary to 
complete the EIS/EIR. Mr. Lyman further explains that 
the additional $325,818 not included in the grant proposal 
will be expended on increased efforts for the analysis of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

10 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 

Surface Transportation ($60,000), Fisheries ($180,818), 
Recreation Assessment ($40,000), and California 
Environmental Quality Act (CEQA) analysis of a System 
Management Alternative ($45,000). 

Commercial paper, referenced as a funding source in 
Attachment II, is a short-term financing instrument used 
by both corporations and municipal issuers as bridge 
financing until long-term financing is issued. It is used 
on an as-needed basis to meet short-term cash demands. 
Commercial Paper maturities range from one to 270 days. 
As shown in Attachment II, the Airport has budgeted 
Commercial Paper totaling $11,800,000 as the initial 
funding authority for the contract with URS. 

Budget: A summary of the URS contract costs, including the 

proposed Contract Modifications No. 4 and No. 5, is as 
follows: 

Contract Modifications Amount 

Original contract $1,100,000 

Contract Modifications No. 1 - 3 10,700,000 

Contract Modification No. 4 2,650,000 

Contract Modification No. 5 5.291.558 

Total $19,741,558 

Attachment III, provided by the Airport, contains the 
tasks and budget details for the proposed Modification 
Nos. 4 and 5 to the URS contract in the amount of 
$7,941,558. 

Comments: 1. Under Charter Section 9.118(b), all contracts in excess 

of $10,000,000 or which have a term often years or more, 
except for construction contracts, are subject to Board of 
Supervisors approval. The contract with URS, including 
Modifications No. 1 through No. 3, totaled $11,800,00 for 
Phase I and a portion of Phase II, thereby exceeding the 
$10,000,000 threshold by $1,800,000. However, according 
to Ms. Gretchen Nicholson of the City Attorney's Office, 
neither Contract Modification No. 2 nor Contract 
Modifications No. 3 were submitted to the Board of 
Supervisors for approval. On May 31, 2002, the City 
Attorney issued Opinion No. 2002-03 pertaining to the 
application of Charter Section 9.118(b) stating that: 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



The City Attorney's Office has received questions in the 
past concerning the application of Charter section 9.118(b) 
to construction-related professional services contracts. 
Although we have not previously issued formal advice on 
these questions and they have arisen infrequently, deputies 
have given varying advice to departments concerning this 
provision. 

In Opinion No. 2002-03, the City Attorney advises, with 
respect to contracts pertaining to architectural, 
engineering, and construction management services, that 
Board of Supervisors approval is now required for 
contract modifications, if the modification causes the 
cumulative amount of the contract to exceed $10 million, 
or causes the term of the contract to exceed 10 years. 

Therefore, according to Ms. Nicholson, the City Attorney 
has concluded that the proposed Contract Modifications 
No. 4 and No. 5 are subject to Board of Supervisors 
approval. 

2. According to Mr. Kone, the original contract for 
completion of the EIR/EIS process for the runway 
reconfiguration project was awarded to URS through a 
competitive Request for Proposals (RFP) process. Four 
companies responded to the Airport's RFP, and the 
responses from these four companies were judged by a 
panel including representatives from the FAA, the 
Planning Department's Office of Environmental Review, 
and the Airport. Attachment IV, provided by the Airport, 
explains the selection process of URS regarding 
Modifications No. 4 and No. 5. Mr. Lyman advises that 
for the sake of continuity of analysis, the Airport believes 
it is important to award the work contained in the 
proposed contract modifications to URS, the contractor 
that has conducted all previous related work to date 
under the existing contract. 

3. The proposed grant period is from June, 2002 through 
June, 2004. However, according to Mr. Lyman, the grant 
period will officially commence upon approval of the 
subject resolution by the Board of Supervisors. Mr. 
Lyman explains that the proposed grant is only now 
coming before the Board of Supervisors, approximately 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



Memo to Finance Committee 

September 25, 2002 Finance Committee Meeting 



two months after the grant period began, because after 
the City Attorney issued an Opinion that the subject 
contract was subject to Board of Supervisors approval, the 
Airport Commission decided to wait until the contract 
modifications had been negotiated, and submit acceptance 
of the grant and the contract modifications to the Board of 
Supervisors together. According to Mr. Kone, to date 
none of the subject AIP grant funds have been expended. 

4. On June 24, 2002, the Board of Supervisors 
appropriated $11,235,148 for the Airport's runway 
reconfiguration project, of which the Board of Supervisors 
placed on reserve $5,000,000 (File 02-1068). The 
$5,000,000 in reserved funds cannot be expended by the 
Airport until such funds are released by the Finance 
Committee. 

5. Attachment V to this report is the Department's Grant 
Information Form, including the Disability Access 
Checklist. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Attachment I 
Page 1 of 3 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 



INTEROFFICE MEMORANDUM 



TO: Harvey Rose DATE: August 29, 2002 

FROM: Greg Lyman/^^? -^ Z5 

RE: Description of the Runway Retffnligurafion Project 



tunvray lorctrnfiffuration Projec 



The- following responds to your request to briefly describe the project including the project 
purpose and the draft alternatives proposed for environmental review. 

The runway reconfiguration project includes feasibility studies, planning studies, geotechnical 
studies, environmental studies, mitigation studies, benefit-cost analysis, cost and schedule 
control studies, analysis of no-build solutions to delays and capacity issues, and the 
development of off shore runway construction concepts for environmental studies. The purpose 
of the project is to reduce existing and projected flight delays and accommodate exiting and 
anticipated aircraft, as well as projected flight demand, thereby achieving efficient airport 
operations under all weather conditions while addressing SFO's goal of reducing human 
exposure to noise. 

The Draft Environmental Impact Statement and Draft Environmental Impact Report that are 
under development will evaluate as many as six alternatives that are under consideration. At 
this time, the draft alternatives under consideration include: 

Three No-Build Alternatives 

No-Project Alternative: SFO would neither physically change its existing ninways to 
expand capacity nor modify management strategies to control demand. Instead, the 
market would continue to set the demand for flights at SFO. Those activities previously 
approved in SFO's Master Plan would be undertaken, including light rail system; 
refurbishment of Terminal 2; and rebuilding of Boarding Area B to modem seismic 
standards. 

No Runway Construction Alternative 1: Under this draft alternative, the number of 
scheduled flights at SFO would be strictly limited by assigning each scheduled flight to 
a specific time slot, called "slot control". Slot control is proposed for the per od of 7:00 
AM to 10:00 PM; late night activity (10:00 PM to 7:00 AM) would be limited to no 
more than 1 999 operation levels. Three draft variations on slot controls would be 
proposed for that 7:00 AM to 10:00 PM period: 

14 



Attachment I 
Page 2 of 3 



Memorandum to Mr. Harvey Rose 
August 29, 2002 
Page 2 of 3 



Variation 1 (30 Slots): The arrival rate at SFO would be limited to 30 arrivals 
per hour between 7:00 AM to 10:00 PM. 

1 Variation 2 (38 Slots with Aggressive Technology): The arrival rate at SFO 
would be limited to 38 arrivals per hour between 7:00 AM to 10:00 PM. This 
variation assumes that technologies to improve the unfavorable weather capacity 
of SFO will be developed, certified, and implemented on a much more 
optimistic and aggressive schedule than currently forecast by the FAA and 
assumed for other Project alternatives. 

Variation 3 (38 Slots with Aggressive Technology & No General Aviation or 

Cargo): The arrival rate at SFO would be limited to 38 arrivals per hour 
between 7:00 AM to 10:00 PM. Variation 3 assumes the same aggressive 
technology as Variation 2 would be in place and would expand the unfavorable 
weather capacity at SFO. This variation also assumes that no genera, aviation or 
cargo flights would be allotted slots to use SFO. 

No Runway Construction Alternative 2: In accordance with Public Resources Code 
Division 13 Section 21151.10, this draft alternative would strictly limit the number of 
scheduled flights at both SFO and OAK through slot controls and would form a joint 
management authority (JMA) between SFO and OAK and connect the airports with 
high-speed transit options. Three draft variations would be proposed: 

Variation 1 High-Speed Rail Connection: The variation would include 
construction of a high-speed rail connection between SFO and OAK ind the 
arrival rate at SFO would be limi ted to 30 arrivals per hour and arrivals at OAK 
would be limited to 21 slots. 

Variation 2 High-Speed Ferry Connection: The variation would include 
construction of a high-speed ferry connection between SFO and OAF. and the 
arrival rate at SFO would be limited to 30 arrivals per hour and arrivals at OAK 
would be limited to 21 slots. 

Variation 3 Existing Mass-Transit Connection: The variation would include 
analysis of existing mass t ransit connections between SFO and OAK and the 
arrival rate at SFO would be limited to 30 arrivals per hour and arrive Is at OAK 
would be limited to 2 1 slots. 

Three Runway Construction Alternatives: The three draft Runway Construction 
Alternatives attempt to address the Project's objectives by physically modifying the layout of 
the existing runways. 

Runway Construction Alternative 1 (also known as A3): This draft 
alternative would involve the construction of (1) a new runway and associated 
taxiway and (2) runway safety areas (RSAs) on all existing runways. 

Runway Construction Alternative 2 (also known as BX6)i This craft 
alternative would involve the construction of (1) two new runways and 
associated taxiways and (2) runway safety areas (RSAs) on all existirg runways. 

15 



Attachment I 

Page 3 of 3 
Memorandum to Mr. Harvey Rose 
August 29, 2002 
Page 3 of 3 

Runway Construction Alternatives (also known as BXR): The proposed 
changes for this draft alternative are similar to those for Runway Construction 
Alternative 2 (BX6) one of the new runways would be longer and wider. 

If you need any additional information, please feel free to contact the Airfield Development 
Bureau. 



Sarah Graham 
Leo Fermin 
Cathy Widener 
Kevin Kone 
Stuart Sunshine 
Tom Kardos 
Deb Ward 
Melba Yee 
Ralph Stewart 



16 



Attachment II 
Page 1 of 2 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 



INTEROFFICE MEMORANDUM 

TO: Harvey Rose DATE: August 14, 2002 

FROM: Greg Lyman 

RE: Application of Grant Funding to Project Costs 

The following responds to your request to document FAA's statement the 
Entitlement Grant will fund ongoing tasks. FAA Representatives stated the- FAA, 

when it converted the application for an Airport Improvement Program 
Discretionary Grant into an Entitlement Grant Offer, considered and agreed the 
grant would cover work being completed under the existing contract 
(Modifications Nos. 2 and 3). The attached table further illustrates how the grant 
will be applied to ongoing and future work. Additionally, the table indicates the 
source of funds to pay the contractor and the source of revenues to replerish 
those funds. 



Cc: Sarah Graham. 
Leo Fermin 
Cathy Widener 
Kevin Konc 
Stuart Sunshine 
Tom Kardos 
Deb Ward 
Melba Yee 
Ralph Stewart 



17 



Attachment II 
Page 2 of 2 



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18 



Attachment III 



Detailed Cost Estimate for EIR and EIS from 11/1/01 through Draft and Comment Period (1 0/03) 



Task 


Total Cost 


FAA 

Grant 
Type 


Discretionary 
andPFC 
Eligible 


Entitlement ! 
Existing 
Contract 

and Mods. 4 

& 5 


Eligible 
Included in 
Existing 
Contract 

Budoet 


Increase 
After Grant 
Application 


Approx 
Manhours 


Ave. 
Rate 




















Chapter 1.0 Introduction 


525,000 


D 


525. 000 


50 


$0 




158 


S158 


Chapter 2.0 Prolect Objectives 


525,000 


D 


525.000 


50 


SO 




158 


5158 


Chapter 3.0 Alternatives 


D 


545.000 


SO 


SO 


S20.000 


365 


S117 


Chapter 4.0 Environmental Setting, Impacts, and 
Mitigation 














13S9 


S157 


Noise 


S'iS.000 


D 


515.000 


$0 


SO 




Land Use, Plans ano Pclic.es 


$5,000 


D 


S5.000 


$0 


$0 




Air Quality 


510.000 


D 


510.000 


$0 


so 




Hvdroloqy/Water Quality 


550,000 


D 


550,000 


so 


so 




Recreation 


55000 


D 


S5.000 


50 


so 




Cultural Resources 


55 ::o 


D 


$5,000 


$0 


so 




Biolocical Resources 


s=:.ooc 


D 


550.000 


SO 


$0 




Energy 


$15,000 


D 


S15.000 


so 


50 




Visual Resources 


SE.000 


D 


$5,000 


so 


so 




Solid Waste 


S5.000 


D 


$5,000 


so 


so 




Hazardous Waste 


55.000 


D 


$5,000 


so 


so 




Public Sendees and Utilities 


530.000 


D 


530.000 


$0 


$0 


$25,000 


Surface Transportation 


510,000 


D 


S10.000 


$0 


so 




Geologv.'Seism.city 


55,000 


D 


$5,000 


$0 


so 




Chapter 4.0 Total 


S215.DD0 












Chapter S.O Habitat Mitlqation 


S22.000 


D 


522,000 


so 


so 




142 


5155 


Chapter 6.0 Cumulative Impacts, Unavoidable 
Impacts, Growth Inducement 


S15.500 


D 


$15,500 


$0 


so 




125 


S124 


Chapter 7.0 Coordination and Public Involvement 


$56,000 


D 


$58,000 


$0 


$0 




440 


$132 


Chapter 8.0 Preparers and Distribution List 


59.000 


D 


59,000 


so 


$0 




74 


$122 


Chapter 9.0 Bibliography S5.500 


D 


55.50C 


so 


$0 




55 


$100 


Chapter 10.0 List of Abbreviations, Acronyms and 
Glossary 


55,000 


D 


$5,000 


so 


$0 




50 


S100 


Chapter 11.0 Index 


$15,400 


D 


$15 400 


so 


so 




ISO 


S9S 


Draft EIR Publication 














390 


S120 • 


Administrative Draft EIR 


S50.000 


D 


550,000 


so 


so 




Camera Raady Draft EIR 


5100.000 


D 


S100.000 


$0 


$0 




Draft EIR 


5150.000 


D 


5150.000 


$0 


$0 




Draft EIR Publication Total 


S300.0D0 












Protect Management 


S415.00D 


D 


5415,000 


$0 


$0 




3050 


$136 




51,155.400 




$1,155,400 


$0 


$0 


545.000 


5555 


$176 


EIR Total Cost 


S7.941.55B 




$1,155,400 


$7,75B.B08 


$972,450 


S325.818 


56,7931 5140 



Post S1 1.8 million contract $7,941,558 

Amount of increase after Grant Application S325.818 

Total Entitlement Eligible $7,477,790 

Contract Mod. 4 and 5 Entitlement Eligible $6,505,340 

Grant Submission Amount $7,055,410 

FAA 75% $5,291 ,558 

FAA Portion to Mod 4 and 5 $4,879,005 

FAA Portion to Existing Contract $412,553 

SFO Match 25% $1,763,853 

SFO Match to Mod 4 and 5 $1,626,335 

SFO Match to Exisitng Contract $137,518 

Modification No. 5 Total $2,650,000 

Modification No. 4 Total $5,291 ,558 



Source: Airport Commission 



19 



Pnnt Date: &.TZQ2 



Attachment IV 



AIRPORT COMMISSION 

SAJS FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 



INTEROFFICE MEMORANDUM 



TO: Harvey Rose DATE: August 14, 2002 

FROM: Greg Lyman^^U^ 3* 

RE: Selection of URS for Modifications Nos. 4 and 5 



The following responds to your request to document the third party relationship 
between the FAA and the City and how that relationship affects the selection of 
URS for Modifications Nos. 4 and 5 and subsequent modifications, as necessary. 

The contract in question is "owned" by the Federal Aviation Administration (FAA). 
The Airport Commission has entered into a Memorandum of Understanding 
(MOU) with the FAA and OER regarding the contract. The MOU details the 
specific conditions with regard to the manner in which each of the agencies (the 
FAA, OER and SFO) will interact with URS and how the scope of work, 
deliverables and costs will be determined and directed. 

This is the standard arrangement for all contracts with environmental consultants 
who are responsible for conducting the studies and producing the reports and 
documents that will go into the development of an Environmental Impact 
Statement. In actuality it is required by federal law that the contracts be 
structured in this manner. As such, the FAA participated in, and was responsible 
for the selection of the consultant for this contract. The selection was based on 
responses to a Request for Qualifications process in which there were four (4) 
respondents. After conducting interviews with all of the respondents, the FAA 
selected URS Corporation (formerly URS Greiner) and directed SFO to 
administer said contract. 

Cc: Sarah Graham 
Leo Fermia 
Cathy Widener 
Kevin Kone 
Stuart Sunshine 
Tom Kardos 
Deb Ward 
Melba Yee 
Ralph Stewart 

20 



Attachment V 
Page 1 of 3 



File Number: 



Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a 
Department to accept and expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: Accept and Expend Grant Funds under the Airport Improvement 

Program (AIP), AIP Project No. 3-06-0221-19 

2. Department: Airport Commission 

3. Contact Person: Cathy Widener Telephone: (650) 821-5023 

4. Grant Approval Status (check one): 

[X] Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $5,291,558.00 

6a. Matching Funds Required: $1,763,853.00 

b. Source(s) of matching funds (if applicable): 

AIP Project No. 3-06-0221-19, $2,324,182 in Capital Improvement Project 
Funds. Funds provided ($2,324,182) exceed required matching funds 
($1,763,853) because some project costs are not eligible for reimbursement 
under this grant program. Total project costs are projected to be 
$7,615,740. 

7a. Grant Source Agency: Federal Aviation Administration 

b. Grant Pass-Through Agency (if applicable): N/A 

8. Proposed Grant Project Summary: 

Please Refer to Page 12 of 25 in the Grant Application, Attachment F 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 
Start Date: June, 2002 End Date: June, 2004 

1 0. Number of new positions created and funded: 

11. If new positions are created, explain the disposition of employees once the 
grant ends? N/A 

21 



Attachment V 
Page 2 of 3 



12a. Amount budgeted for contractual services: 
$7,615,740.00 

b. Will contractual services be put out to bid? 

Contracted services are reimbursable. This grant reimburses City for 
services rendered on a contract competitively bid in 1999. 

c. If so, will contract services help to further the goals of the department's 

MBE/WBE requirements? 

Contract services are furthering department's DBE requirement. MBE/WBE 

goals do not apply to FAA contracts. 

d. Is this likely to be a one-time or ongoing request for contracting out? 

Ongoing 

13a. Does the budget include indirect costs? [ ] Yes [X] No 

b1. If yes, How much? N/A 

b2. How was the amount calculated? N/A 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency 

[ ] To maximize use of grants funds on direct services 

[X] Other (please explain): 
According to the Lease and Use Agreement between the City of San Francisco 
and major airlines using San Francisco International Airport, the Annual Service 
Payment made to the City shall constitute full satisfaction of all obligations of the 
Airport. Please refer to Attachment l. 

14. Any other significant grant requirements or comments: N/A 



** Disability Access Checklist** 

1 5. This Grant is intended for activities at (check all that apply): 

[X] Existing Site(s) [X] Existing Stmcture(s) [ ] Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structures(s) [ ] New Program(s) or Service(s) 

[X] New Site(s) [X] New Structure(s) 



22 



Attachment \ 
Page 3 of 3 



1 6. The Departmental ADA Coordinator and/or the Mayor's Office on Disability has 
reviewed the proposal and concluded that the project as proposed will be in 
compliance with the Americans with Disabilities Act and all other Federal, State 
and local access laws and regulations and will allow the full inclusion of persons 
with disabilities, or will require unreasonable hardship exceptions, as described in 
the comments section: 



Comments: 



Departmental or Mayor's Office of Disability 

Reviewer: (Name) 

Date Reviewed: 



Department Approval: 

RONALD J. FONG ADA PROGRAM MANAGER 



(Name) (Title) 




23 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 

Item 5 - File 02-1219 



Department: 
Item: 



Treasurer/Tax Collector 

Ordinance amending the Business and Tax Regulations 
Code to: (1) amend Article 6 Sections 6.17-1 through 6.17- 
4 to increase penalties imposed upon businesses who fail 
to: (a) pay the Payroll Tax or the Gross Receipts Tax owed 
to the City, or (b) file a business tax return or who file a 
business tax return subsequent to the City's due dates, 
and (2) amend Article 17 Sections 1700 through 1707 to 
establish a Business Tax Penalty Amnesty Program 
during Fiscal Year 2002-2003 for penalties owed to the 
City on delinquent annual Business Registration 
Certificate fees and on delinquent Payroll Tax and Gross 
Receipts Tax for tax periods ending on or before December 
31, 2001. 



Description: 



Prior to January 1, 2000, firms doing business in the City 
were required to pay the City either the Payroll Tax or 
the Gross Receipts Tax, whichever was higher, as a 
business tax for work performed in the City. The City 
currently imposes only the Payroll Tax on firms engaged 
in business in the City since the Gross Receipts Tax was 
repealed on January 1, 2000 (Ordinance No. 63-01). The 
proposed ordinance would apply to penalties on both the 
Payroll Tax and the Gross Receipts Tax, depending on the 
tax periods for which the penalty applies. 

In addition to paying business taxes, firms engaging in 
business in the City must obtain an annual Business 
Registration Certificate from the Office of the 
Treasurer/Tax Collector. Business Registration Certificate 
fees and business taxes are remitted to the City's General 
Fund. Businesses that (a) fail to obtain an annual 
Business Registration Certificate or fail to obtain their 
Business Registration Certificate by the Certificate's due 
date, (b) fail to file a business tax return or file such 
returns subsequent to the City's due dates, or (c) fail to 
pay their business taxes owed to the City, are subject to 
penalties as set forth in Article 6 Sections 6.17-1 through 
6.17-4 of the Business and Tax Regulations Code. 



Board of Supervisors 
Budget Analyst 

24 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



The proposed ordinance would amend the Business and 
Tax Regulations Code as follows: 

• Amend Section 6.17-1 to increase the penalty for 
failure to pay the required business taxes. Under 
current law, businesses are subject to penalties of 5% 
of the amount of the delinquent taxes for each month 
or fraction of the month from the time the tax becomes 
delinquent until paid, not to exceed 20% in the 
aggregate. Under the proposed ordinance, the not-to- 
exceed penalty would increase from 20% of the amount 
of delinquent taxes to 25% of the amount of the 
delinquent taxes. In addition, the proposed ordinance 
would amend Section 6.17-1 to increase the additional 
penalty for failure to pay any business taxes for a 
period of 90 days after notification by the Tax 
Collector's Office that the tax is delinquent from the 
current flat penalty of 20% of the amount of the 
delinquent taxes to a flat penalty of 25% of the amount 
of the delinquent taxes. 

• Amend Section 6.17-2 to increase the penalty for 
underreported business taxes. Under current law, 
businesses are subject to penalties of 5% of the amount 
of the underreported tax for each month or fraction of 
the month from the time the tax becomes delinquent 
until paid, not to exceed 20% in the aggregate. Under 
the proposed ordinance, the not-to-exceed penalty 
would increase from 20% of the amount of delinquent 
taxes to 25% of the amount of the delinquent taxes. 

• Amend Section 6.17-3 to increase the penalty for 
failure to file a business tax return that is required by 
the Business and Tax Regulations Code from the 
current penalty of $100 to $250 for each such failure to 
file. 

• Amend Section 6.17-4 to add a provision stating that, 
during the proposed amnesty period (see below), for 
any business that applies for and receives a waiver of 
penalties under the proposed Business Tax Penalty 
Amnesty Program, the Tax Collector may not waive or 
otherwise reduce interest for the period or periods 
covered by the business' amnesty application. Under 
the current and proposed amended Business and Tax 
Regulations Code, interest accrues at the rate of one 



Board of Supervisors 



Budget Analyst 

25 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



percent per month, or fraction of a month, from the 
date that business taxes become delinquent. 
• Amend Article 17 to establish a Business Tax Penalty 
Amnesty Program in Fiscal Year 2002-2003. Under the 
proposed ordinance, the Tax Collector would designate 
a 60-day amnesty application period to begin on or 
after October 1, 2002 and to conclude on or before 
January 31, 2003, during which time the Tax Collector 
would accept applications to participate in the 
Business Tax Penalty Amnesty Program for Fiscal 
Year 2002-2003. The last such Business Tax Penalty 
Amnesty Program approved by the Board of 
Supervisors was in 1995. 

Liabilities that would be forgiven under the proposed 
Business Tax Penalty Amnesty Program as set forth in 
the proposed amended Article 17 of the Business and Tax 
Regulations Code include penalties owed for failure to pay 
annual Business Registration Certificate fees, penalties 
owed for failure to file a business tax return or for filing 
late, and penalties owed for failure to pay business taxes 
for tax periods ending on or before December 31, 2001. 
Liabilities that would not be forgiven under the proposed 
Business Tax Penalty Amnesty Program include unpaid 
Business Registration Certificate fees, unpaid business 
taxes, accrued interest on delinquent taxes, penalties 
owed as a result of a jeopardy determination 1 that has 
become final prior to the 60-day amnesty application 
period, penalties paid prior to the amnesty period, and 
penalties owed which are related to any determination 
under administrative review or penalties owed that are 
included in any civil tax collection litigation commenced 
by the Tax Collector prior to the 60-day amnesty 
application period. 

To qualify for the Business Tax Penalty Amnesty 
Program, a business must: (a) file completed business tax 
returns for all periods for which the business has not 
previously filed a business tax return or not filed an 
amended business tax return for all periods for which the 



1 Mr. Mark Buckley of the Treasurer/Tax Collector's Office explains that a jeopardy determination is 
when the timeline for payment of taxes is expedited due to the potential flight risk of the taxpayer. 

Board of Supervisors 
Budget Analyst 

26 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 

business underreported taxes owed to the City, (b) pay in 
full all business taxes and interest due to the City (see 
Comment No. 7d), and (c) execute a written waiver of the 
business' rights to seek a refund of the amounts paid to 
the Tax Collector for all periods for which the business 
submits a tax penalty amnesty application under the 
proposed Business Tax Penalty Amnesty Program. 

If a business qualifies to participate in the Business Tax 
Penalty Amnesty Program, the Tax Collector shall: (a) 
waive all penalties for failure to pay annual Business 
Registration Certificate fees or failure to file a business 
tax return, (b) waive all penalties for delinquent business 
taxes, (c) refrain from initiating proceedings to suspend or 
revoke the Business Registration Certificate previously 
issued to the business, and (d) refrain from initiating any 
civil action against the business for the tax periods for 
which the tax penalty amnesty is granted. 

Comments: 1. The Attachment is a memorandum from Mr. George 

Putris of the Treasurer/Tax Collector's Office showing the 
results of the last 1995 Amnesty Program. According to 
Mr. Putris, the 1995 Business Tax Penalty Amnesty 
Program was effective from December 1, 1994 to January 
31, 1995. The Attachment shows that as a result of the 
1995 Business Tax Penalty Amnesty Program, the City 
realized $4,949,336 in delinquent Business Registration 
Certificate fees and business taxes offset by additional 
City costs of $770,952, for a net revenue gain to the City 
of $4,178,384. Mr. Putris reports in the Attachment that 
"the aggregate amount of penalties waived in connection 
with the 1995 Amnesty Program were not recorded at the 
time and cannot easily be determined now." The 
Treasurer/Tax Collector's Office has no information on the 
amount of revenue forgone by the City under the 1995 
Amnesty Program, representing penalties on the 
delinquent taxes and Business Registration Certificate 
fees. 

2. Mr. Putris states in the Attachment, "If all delinquent 
taxpayers with collectable accounts availed themselves of 
the proposed Business Tax Penalty Amnesty Program, the 



Board of Supervisors 
Budget Analyst 

27 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



total amount of outstanding penalties subject to 
forgiveness would be $12,466,561." 

3. As detailed in the Attachment, Mr. Putris reports that 
the Treasurer/Tax Collector's Office would need to request 
a supplemental appropriation of $1,321,181 in Fiscal Year 
2002-03 to cover the costs of staff time and related costs 
that would be required to process applications for the 
Business Tax Penalty Amnesty Program should this 
proposed ordinance be approved by the Board of 
Supervisors. Mr. Putris advises that the estimated 
supplemental appropriation of $1,321,181 is the amount 
of additional funds that the Treasurer/Tax Collector's 
Office would require if the applications for the proposed 
Business Tax Penalty Amnesty Program were to be 
accepted for a 60-day period between October 1, 2002 and 
January 31, 2003. According to Mr. Ed Harrington, 
Controller, the Controller's Office is unable at this time to 
certify increased business tax revenues and related 
interest income that might result from implementation of 
this proposed ordinance which could serve as a source of 
funds for such a supplemental appropriation. 

4. As previously noted, an increase in penalties would be 
imposed on businesses (a) which fail to pay business taxes 
owed to the City, from the current not-to-exceed penalty 
of 20% of the amount of taxes owed to a proposed not-to- 
exceed penalty of 25% of the amount of taxes owed, or (b) 
which fail to file a business tax return, whereby the 
current penalty of $100 would be increased to a penalty of 
$250. Mr. Putris advises that the Treasurer/Tax 
Collector's Office is unable to estimate the additional 
revenues to the City which would result from the 
increased penalties under the proposed ordinance. 

5. The Budget Analyst notes that while business tax 
collections may increase during the amnesty period, much 
of that revenue might be collected without an amnesty 
program, simply as a result of the Tax Collector's normal 
auditing and collection procedures. The Attachment 
includes a flow chart of the business tax filing and 
collection process. As previously noted, the Treasurer/Tax 
Collector's Office has no information on the forgone 

Board of Supervisors 
Budget Analyst 

28 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



revenues to the City from the 1995 amnesty program. As 
also previously noted, Mr. Putris estimates that the 
amount of penalty revenues which may be forgone by the 
City if the proposed Business Tax Penalty Amnesty 
Program is approved by the Board of Supervisors is 
$12,466,561. 

6. Although the Controller is unable to certify additional 
increased revenue which may result from the proposed 
Business Tax Penalty Amnesty Program, such a Program 
could result in improved compliance with the City's 
business tax laws and could result in an increase to the 
City's business tax base if the number of currently 
unregistered businesses use the amnesty program to 
become registered with the City. The potential for an 
increased number of registered businesses could therefore 
be viewed as a long term revenue benefit resulting from 
the proposed Business Tax Penalty Amnesty Program. 

7. According to Mr. Dorji Roberts of the City Attorney's 
Office, the Office of the Sponsor intends to submit an 
Amendment of the Whole at the Finance Committee's 
October 3, 2002 meeting. Mr. Roberts advises that the 
Amendment of the Whole may contain the following 
changes or additions: 

(a) The Tax Collector would designate the 60-day amnesty 
application period to begin on or after March 1, 2003 
instead of on or after October 1, 2002 and to conclude 
on or before June 30, 2003 instead of on or before 
January 31, 2003, during which time the Tax Collector 
would accept applications to participate in the 
Business Tax Penalty Amnesty Program for Fiscal 
Year 2002-2003. 

(b) The proposed ordinance would include language to 
clarify that any loss or partial loss of ehgibility for the 
Small Business Exemption resulting from the failure 
to file a timely return would be deemed a penalty 
subject to waiver under the proposed Business Tax 
Penalty Amnesty Program. If a business owes $2,500 
or less in business taxes to the City and files a timely 
business tax return, then the business is exempt from 
payment of the tax under the Small Business 
Exemption. If a small business fails to file a business 

Board of Supervisors 
Budget Analyst 

29 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 

tax return on time and the business owes $2,500 or 
less in business taxes, the business would lose its 
Small Business Exemption status, resulting in the 
necessity to pay penalties on the amount of taxes that 
are exempt from payment of the tax under the Small 
Business Exemption. Such penalties would be subject 
to waiver under the proposed Business Tax Penalty 
Amnesty Program. 

(c) The proposed ordinance would include a Statement of 
Intent regarding future Business Tax Penalty 
Amnesty Programs to state that it is the intent of the 
Board of Supervisors that future amnesty programs 
could not take place for at least five years following the 
conclusion of the proposed amnesty program period. 

(d) The proposed ordinance would include language to 
require that when a business qualifies to participate in 
the proposed Business Tax Penalty Amnesty Program, 
and that business enters into an installment payment 
agreement with the City to repay in full over time its 
delinquent business taxes, related interest, and/or 
fees, then the business must pay upfront 50% of the 
outstanding balance due to the City. 

Recommendation: Approval of the proposed ordinance is a policy decision for 

the Board of Supervisors. 



Board of Supervisors 
Budget Analyst 

30 



SEP-2S-2O02 17=4: 



5F TAX COLLECTOR ADMIN. 



Attachment 
Page 1 of 4 



MEMORANDUM 



TO: 



Anna LaForte 



,h? 



FROM: George Putris, Tax Administrator 

DATE: September 25, 2002 

RE: Proposed Business Tax Penalty Amnesty Program 

CC: Hon. Susan Leal, Treasurer/Tax Collector 



We have considered your questions concerning the proposed Business Tax Penalty Amnesty 
Program and respond as follows: 

1. Program Costs 

Set forth below is an estimated budget for the proposed Business Tax Penalty Amnesty 
Program. This budget relies upon the actual costs incurred during the fiscal year 1994/1995 
Amnesty Program. 

Assumptions: 

• Inflation rate at 20 percent for programming and materials. Employee compensation set forth 
at current rates. 

• Total number of businesses participating in the proposed amnesty program same as in the 
prior program; that is, approximately 10,000 applicants, of which 4,500 ultimately required 
to pay delinquent tax obligations. 

• Additional staff will be needed for a six-month period to complete the processing of 
applications and payment arrangements. 

Cost FTE Annual Hourly 

Temporary Positions 

4222 Sr. Auditor 36,400 

4220 Auditor 125,736 

1632 Sr. Acct Clerk 130,728 

1630 Acct Clerk 89,378 

1424 Clerk Typist 43,316 

FTE Total 425,558 

Benefits 140,434 

Overhead 106,389 

Advertising 350,000 
Materials.Supplics, Mailing, & 

Programing 298,800 



0.5 


72800 


35 


2 


62868 


30.225 


2 


65364 


31.425 


2 


44688.8 


21.485 


1 


43316 


20.825 


0.33 






0.25 







Total 



1,321,181 



31 



SEP-2£-20e2 17=44 SF TAX COLLECTOR ADMIN. 

Attachment 
Page 2 of 4 

2. Supplemental Appropriation Required 

The Treasurer's Office has not included the above-estimated costs in its fiscal year 
2002/2003 budget. Therefore, supplemental appropriations equal to the entire program costs 
would be required. 

3. Aggregate Penalties Subject to Forgiveness Under Proposed Amnesty Program 

If all delinquent taxpayers with collectable accounts availed themselves of the proposed 
Business Tax Penalty Amnesty Program, the total amount of outstanding penalties subject to 
forgiveness would be $12,466,561. 

The total amount collected during the fiscal year 1 994/1995 Amnesty Program was 
54,949,336. The total cost of administering such Program was 5770,952, of which $249,162 was 
for materials, supplies and programming. The aggregate amount of penalties waived in 
connection with such Program were not recorded at the time and cannot easily be determined 
now. 

4. Delinquent Revenue Collection Process 

The department's Bureau of Delinquent Revenue ("BDR") is primarily responsible for 
identifying and collecting delinquent business tax revenues due and owing to the City and 
County of San Francisco. A summary of BDR's procedures are set forth below: 

• Delinquent accounts are identified using "on-hold" reports generated daily from DTIS. This 
report reflects registered businesses that have made a payment but, due to a prior year's 
delinquency, have a "hold" on the issuance of a new registration certificate. 

• For delinquent accounts, collectors researoh and compile all taxes, including business taxes 
and unsecured properly taxes (UPP), and send a statement of account to the taxpayer. 

• Taxpayers contact the office to pay, dispute or clarify the account. If payment in full is 
received, the registration will issue automatically by the Business Tax System ("BTS"). If 
the taxpayer disputes the liability and requests a waiver of penalties, the matter is forwarded 
to Business Tax Section. If the taxpayer sends documentation to substantiate the basis of the 
dispute (e.g., the business closed a year ago), then an adjustment request is forwarded to the 
Taxpayer Assistance or Business Tax Section. 

• If the taxpayer fails to respond, a second letter is sent. If no response is received, then the 
account is forwarded to Investigations for further action and possibly the recordation of a 
lien. If the amount is under $5,000, the business tax summary judgments procedure may be 
used. If the amount is over $5,000, the account is forwarded to Legal Section to review for 
possible legal action. 

• Separate from this process, collectors work to proactively identify business who are 
delinquent in tax payments in excess of those identified in the "on-hold" report. The 
following means are used: 



32 



SEF-26-2002 17:44 SF TAX COLLECTOR ADMIN. * ' 

Attachment 
Page 3 of 4 



i. Cross referencing taxpayer accounts in the BTS and various lists of 
delinquent UPP taxes and other files and lists provided by third parties, 
including Dunn and Bradstreet, the Franchise Tax Board, and the State 
Board of Equalization. This cross-checking procedure typically yields the 
identities of large numbers of unregistered businesses. 
ii. Search of the BTS for large delinquent obligations to collect (also known 

as "cherry picking"), 
iii. Identification of unregistered companies and individuals doing business in 
the City and County of San Francisco using the Internet, periodicals, 
newspapers, etc. 

The chart attached to this Memorandum provides an ove?view ofBDR 's collection process. The 
chart outlines procedures associated with non-payment of business taxes over time and reflects 
the categories of businesses who would be eligible for a new Amnesty Program. 



5. Long Term Results of Prior Amnesty Program 

It is reasonable to assume that some number of unregistered businesses that availed 
themselves of the prior amnesty program paid past and future taxes that would not have been 
collected but for such program. Some of these businesses would probably have been identified 
by BDR in the ordinary course of business; therefore, it is possible that the prior amnesty 
program reduced post-amnesty collections. Stated in another way, the amnesty program, by 
accelerating collections to the amnesty period, reduced later collections by a like amount. 

6. Policy Implications of Amnesty Programs 

The reduction of the number of non-compliant businesses eases BDR's burden of 
discovering and collecting delinquent tax obligations. In addition, amnesty serves to accelerate 
the collection of past-due tax obligations. 

Two unintended effects of amnesty programs are as follows: 

• Some of the taxpayers who have diligently complied with the City and 
County of San Francisco's various taxation laws or have actually paid the 
types of penalties forgiven under amnesty programs take exception to what 
they consider the special treatment that non-compliant businesses receive 

under such programs. 

• In the taxable years following an amnesty program, some non-compliant 
businesses who incur penalties choose not to come forward, choosing instead 
to wait for a future amnesty program. 



33 



SE=-2c-2232 17=44 



SF TAX COLLECTOR ADMIN. 



Attachment 



Page 4 of 4 

Business Tax Filing & Collection Process 



ALL BUSINESSES 



REGISTERED 



DayO: 

TAX 

DUE DATE 



NOT REGISTERED 



Businesses who 

file returns and pay 

obligation, if any. 



Businesses who 
do not file returns. 



Day 1- 



▼ 

AUDITS 

A percentage 

of these filers 

■- are- audited • 




Day 90 



Businesses who 

file returns, and have 

unpaid balance. 



LATE STATUS 

Subject to penalties 

and interest 



DETERMINATION ISSUED. 

TTX estimates tax amount due, 

penalties, interest and fees, and 

notifies taxpayer. 



Day 120 



DELINQUENT STATUS 

Subject to penalties and 

interest 



DETERMINATION FINAL, 

if no payment or protest Subject to 

collection by BDR. 



Day 220 i 



Additional penalties accrue. 



34 



TOTAL P. 04 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



Item 6 - File 02-1417 

Department: 

Item: 



Description: 



Comment: 



Recommendation: 



Mayor's Office 

Ordinance repealing Section 10.148 of the San Francisco 
Administrative Code, thereby eliminating the Mayor's 
Office Cash Revolving Fund in the amount of $1,000. 

Article XV, Section 10.125 of the Administrative Code 
authorizes the amounts contained in various 
departmental Cash Revolving Funds. A Cash Revolving 
Fund, otherwise known as a petty cash fund, is a Fund 
with a specifically appropriated amount that a 
department may use to make change for cash 
transactions, make petty cash purchases or make 
disbursements which cannot be conveniently made by 
warrants drawn by the Controller. 

The proposed ordinance would amend Section 10.148 of 
the Administrative Code to delete reference to the 
Mayor's Office Cash Revolving Fund, thereby ehminating 
that Fund in the amount of $1,000. Mr. Ben Rosenfield of 
the Mayor's Office reports that the Mayor's Office closed 
the Mayor's Office Cash Revolving Fund Account and 
returned the balance of $1,000 to the Controller's Office in 
July of 2000. 

According to Mr. Rosenfield, there should be no fiscal 
impact from the ehmination of the Mayor's Office Cash 
Revolving Fund. 

Approve the proposed ordinance. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

35 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 

Item 7 - File 02-1526 



Departments: 



Item: 



Amount and Source 
of Funds: 



Background: 



Public Library 
Redevelopment Agency 
Department of Administrative 
Division (RED) 



Services, Real Estate 



Ordinance approving and authorizing the Director of 
Property to execute an Agreement of Purchase and Sale of 
Real Property between the City and County of San 
Francisco and the San Francisco Redevelopment Agency 
(SFRA) for the purchase, by the City from the 
Redevelopment Agency, of a new approximately 7,700 
square foot Mission Bay Branch Library and the land on 
which the new branch library would be constructed. The 
new Mission Bay Branch Library would be located on 
land that is referred to herein as Parcel N3aP-l fronting 
on 4 th Street between Berry Street and the Mission Creek 
Channel within the Mission Bay North Redevelopment 
Plan Area. This proposed ordinance would also authorize 
the City's Director of Property to execute documents, 
make certain modifications and take certain actions in 
furtherance of this Ordinance, without further approval of 
the Board of Supervisors (see Comment No. 9). 



The ordinance authorizes the City's Director of Property 
on behalf of the City, to execute an Agreement of 
Purchase and Sale of Real Property with the 
Redevelopment Agency enabling the City to purchase the 
proposed new Mission Bay Branch Library using General 
Obligation Proposition A Branch Library Facilities 
Improvement Bond, funds previously appropriated by the 
Board of Supervisors in the Public Library's FY 2002- 
2003 budget, at an estimated price of $3,267,000, but at a 
price not to exceed $3,430,350. 

On October 26, 1998, the Board of Supervisors approved 
the Mission Bay North Redevelopment Plan (ordinance 
No. 327-98). According to Ms. Pamela Sims of the 
Redevelopment Agency, as part of the Redevelopment 
Agency's implementation of the Mission Bay North 
Redevelopment Plan, the Redevelopment Agency entered 
into an Owner Participation Agreement ("OPA") with 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

36 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



Catellus Development Corporation (Catellus) on 
November 16, 1998. This OPA, which was not subject to 
Board of Supervisors approval, requires Catellus to 
convey to the Redevelopment Agency a minimum of 2.5 
acres of land and a maximum of 3.8 acres of land for the 
development of affordable housing in exchange for 
development rights and other considerations under the 
Mission Bay North Redevelopment Plan and OPA. One of 
the land parcels that Catellus will convey to the 
Redevelopment Agency in November or December of 2002 
is referred to as Parcel N3aP-l, which will include the 
land for the construction of an approximately 7,700 
square foot Mission Bay Branch Library, referred to as 
"the Library Parcel" in addition to land for the 
development of low income housing and office space. The 
7,700 square foot estimate is the approximate square 
footage of the yet to be constructed Mission Bay Branch 
Library. 

Following the Redevelopment Agency's Request for 
Qualifications (RFQ) process, on January 16, 2001, the 
Redevelopment Agency entered into an Exclusive 
Negotiations Agreement with Mercy Housing California 
(Mercy), a nonprofit organization, to be the developers of a 
mixed-use project on Parcel N3aP-l. The Redevelopment 
Agency will cause Parcel N3aP-l to be subdivided into 
three smaller parcels prior to the start of construction of 
the Mission Bay Branch Library. The first parcel will be 
for approximately 139-units of senior housing (the 
Housing Parcel), the second parcel will be 23,400 square 
feet of office space for nonprofit and public agencies (the 
Office Parcel), and the third parcel for an approximately 
7,700 square foot Mission Bay Branch Library (the 
Library Parcel). According to Ms. Sims, all three parcels 
will be developed by Mercy as a single integrated project. 

Following the subdivision of Parcel N3aP-l, as described 
above, the Redevelopment Agency and Mercy will enter 
into three ground lease agreements, one each for the 
Housing, Office, and Library Parcels. Such agreements 
will not be subject to Board of Supervisors approval. Once 
the development of the Library Parcel is completed, no 
later than 4 years from the date of the proposed subject 
Agreement of the Purchase and Sale of Real Property is 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

37 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 

executed, the ground lease between the Redevelopment 
Agency and Mercy for the Library Parcel will terminate 
and the Redevelopment Agency will own the 
improvements together with the land with respect to the 
Library Parcel. The Redevelopment Agency will then sell 
the Library Parcel to the City, at an estimated price of 
$3,267,000, but at a price not to exceed $3,430,350, in 
accordance with the provisions of the proposed subject 
Agreement of Purchase and Sale of Real Property. 

Description: The proposed ordinance would authorize the Director of 

Property to purchase the Mission Bay Branch Library, 
which would be approximately 7,700 square feet, when 
newly constructed. The construction of the library would 
be completed by no later than four years after the subject 
proposed Agreement for the Purchase and Sale of Real 
Property is executed between the Redevelopment Agency 
and the City. According to Ms. Susan Hildreth of the 
Public Library, the not to exceed amount of $3,430,350 
was determined by the Library Commission based on 
budgetary constraints. The subject ordinance authorizes 
(a) the Director of Property to execute the Agreement of 
Purchase and Sale of Real Property on behalf of the City 
and (b) a construction Rider, which establishes the 
following terms for the construction and disposition of the 
Library Parcel. 

Development 

• The Redevelopment Agency, through its Developer 
(Mercy), would be responsible for the development and 
construction of the Mission Bay Branch Library for the 
City under the terms of the subject Agreement. 

• During the term of the subject Agreement, the 
Redevelopment Agency would require Mercy to submit 
to the Public Library for approval each design phase 1 
of the actual construction plans for the construction of 
the Mission Bay Branch Library. 

• The Redevelopment Agency through its Developer 
(Mercy) would be responsible for correcting all 
defective construction work for one year after 
construction of the Library has been completed. 



1 The development of the design documents for the Library Parcel as well as the overall project will 
occur in the following major phases: (i) Schematic Design, (ii) Design Development, (iii) 50 Percent 
Construction Documents, and (iv) 100 Percent Construction Documents. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

38 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



Purchase Price and Payments 

• According to the proposed Agreement, the City would 
purchase the 7,700 square foot Mission Bay Branch 
Library together with the land from the 
Redevelopment Agency at an estimated price of 
$3,267,000 but for a price not to exceed $3,430,350. If 
the final Purchase Price, adjusted as described below, 
is more than $3,430,350, the City has the option to 
terminate the Agreement (see Comment No. 6). 

• The estimated purchase price of $3,267,000 is based on 
the cost of designing and constructing the core, shell 
and tenant improvements for the Mission Bay Branch 
Library (estimated to cost $2,970,000), plus a 10 
percent fee for project management at an established 
cost of $297,000 ($2,970,000 plus $297,000 equals 
$3,267,000). Attachment I to this report, provided by 
Ms. Sims of the Redevelopment Agency, is a budget for 
the Mission Bay Branch Library. 

• The purchase price may be adjusted after all required 
construction documents have been completed and 
approved by the Pub he Library and after receiving a 
guaranteed maximum price from the Developer 
(Mercy) based upon the final construction documents. 
If the actual cost of constructing the Branch library is 
less than $2,970,000, the purchase price will be 
adjusted downward to the actual cost of construction. 
If the actual cost of constructing the Branch library 
exceeds the estimated purchase price resulting in a 
total price of $3,267,000 either (1) by up to an 
additional five percent or $163,350 of the total 
purchase price resulting in a total price of $3,430,350 
or (2) by other costs as a result of changes to the 
design development plans approved by the Public 
Library, the purchase price will be adjusted upwards. 
The 10 percent project management fee of $297,000 
would not be adjusted. 

• The proposed Agreement requires the Public Library 
to make monthly payments on the final purchase price 
of the branch library to the Redevelopment Agency 
based on itemized invoices submitted by the Developer 
(Mercy) to the Public Library. The invoices would 
detail expenses actually incurred by the Developer 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

39 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 

(Mercy) related to the construction of the Mission Bay 
Branch Library. Ms. Susan Hildreth of the Public 
Library states that the Public Library would make 
monthly payments to Mercy to cover the costs of the 
development of the Mission Bay Branch Library as 
they occur and the City would become the owner of the 
Mission Bay Branch Library upon completion of the 
construction, which is to be no later than four years 
following the execution of the subject Agreement (See 
Comment No. 3). 

Conditions of Sale 

• The Mission Bay Branch Library will be conveyed by 
the Redevelopment Agency to the City in accordance 
with the approved Construction Plans and in "move-in 
condition." 

• The Redevelopment Agency will execute a Declaration 
of Easement, Joint Use and Maintenance Agreement 
with the City requiring the Library Parcel, the Office 
Parcel and the Housing Parcel to share the costs of 
centralized portions of various building systems, 
including the uses and maintenance of the Heating 
Ventilation and Air Conditioning system (HVAC), the 
fire alarm system, and a portion of the main sewer and 
storm drain facility and the on-going costs of cleaning 
the exterior building, street landscaping, sidewalk 
maintenance and repair, and exterior lighting and 
other common areas and expenses, at an estimated 
annual cost to the Public Library of $2,500, according 
to Ms. Sims. 

• The Public Library will have the right to use the 
community meeting room planned for the Housing 
Parcel, which will be owned by the Redevelopment 
Agency, and to rent two parking spaces from the 
Redevelopment Agency. 2 



2 The Public Library will have the right to use community meeting room planned for the ground floor 
of the Housing Parcel" for "non-commercial" activities consistent with the operation of the public 
branch library for up to 20 hours per week provided that the Public Library gives at least 60 days 
prior written notice of its need to use the community room and pays the Redevelopment Agency the 
actual costs of operating the community room based upon the Public Library's actual and 
proportionate use of the community room. The Public Library will have the right to rent two parking 
spaces at fair market from the Redevelopment Agency, and the right to use the loading dock and 
trash room located within the Housing Parcel at no additional cost to the Public Library. According 
to Ms. Sims, these costs have not yet been determined. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

40 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 

• The City would be prohibited from using the Library 
Parcel for anything other than the operation of a 
public branch library unless otherwise approved by the 
Redevelopment Agency for as long as the 
Redevelopment Agency owns the underlying land of 
the Housing Parcel and the Office Parcel. 3 According 
to Mr. Choy, the definition of "Library" is broadly 
defined to include any use approved by the Library 
Commission that supports cultural, education and/or 
recreational uses available to the general public. 

• The City would be prohibited from selling or 
transferring the Library Parcel without written 
consent from the Redevelopment Agency for as long as 
the Redevelopment Agency owns the land of the 
Housing Parcel and the Office Parcel. 

• The Redevelopment Agency would have a Right of 
Reverter (take back ownership of the Library Parcel) if 
the Public Library violates the use or sale/transfer 
restrictions set forth in the proposed Agreement. 
According to Mr. Choy, if the Redevelopment Agency 
exercised the Right of Reverter, the Redevelopment 
Agency would be required to reimburse the City for the 
amount of the final purchase price in addition to any 
depreciated costs of improvements made by the City. 

The proposed ordinance waives the requirements of 
Chapters 6 and 12 of the San Francisco Administrative 
Code related to public works and contracting issues (see 
Comment No. 5), and authorizes the Director of Property 
to enter into any other documents or instruments that are 
necessary or advisable to complete the transaction, 
without Board of Supervisors approval. 

Comments: 1. Attachment II to this report, provided by Ms. Sims, 

summarizes the Request for Qualification process and 
selection criteria, which shows that two nonprofit 
developers, Citizens Housing Corporation (CHS) and 
Mercy submitted proposals to develop the Housing, Office 
and Library Parcels. As shown in Attachment II, and 
according to Ms. Sims, Mercy was selected as the most 
qualified developer based on criteria as established by the 
Redevelopment Agency. 



3 While the Redevelopment Agency will sell the land to the City for the Library Parcel, the 
Redevelopment Agency would retain the land of the other two parcels (Housing and Office Parcels). 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

41 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



2. According to Ms. Hildreth, the General Obligation 
Bonds established by Proposition A "Branch Library 
Facilities Improvement Bonds, 2000" in the amount of 
$105,865,000 would fund 100 percent of the purchase 
price of the land and estimated construction costs for the 
Mission Bay Branch Library. Ms. Hildreth states that 
one of the intended purposes of the General Obligation 
Bond Measure was to allow the City to purchase and 
construct a new branch library in the Mission Bay 
Neighborhood. 

3. According to Ms. Hildreth, the Public Library will 
finance the cost of construction, land and related costs for 
the Mission Bay Branch Library using General Obligation 
Bonds, rather than having the Redevelopment Agency use 
another construction financing strategy and then passing 
on the costs on to the Public Library. Ms. Hildreth notes 
that the City in making installment payments on the 
purchase price for the Mission Bay Branch Library will 
lower the costs of development because the approximate 
3.5 percent interest rate of the General Obligation Bonds 
which the Public Library would use will be lower than the 
approximate 5.75 interest rate, which the Redevelopment 
Agency could secure using another financing strategy, 
such as a commercial construction loan. According to Ms. 
Sims, the Redevelopment Agency cannot issue Tax 
Increment Bonds for the purpose of constructing a public 
library. According to Mr. Choy, taking ownership of the 
property after the Branch Library is constructed limits 
the City's liability during construction. 4 

4. According to Mr. Charlie Dunn of the Division of Real 
Estate, on July 12, 2002, an independent appraiser 
engaged by the Department of Real Estate, Carneghi- 



4 Mr. Choy states that the Construction Rider attached to the Agreement, as Exhibit D requires the 
Redevelopment Agency and Mercy to complete the work in compliance with all laws, regulatory 
approvals, and in accordance with construction plans approved by the Library. According to Mr. 
Choy, the "Work" includes every activity necessary to design and construct the library improvements 
and all other aspects of the foundation, superstructure and infrastructure that serve the Library 
improvements. Mr. Choy notes that the Redevelopment Agency and Mercy are required to provide 
all labor, services, supplies, materials, equipment and testing necessary to perform the Work, and 
Section 6.1 of the Construction Rider requires the Redevelopment Agency to indemnify the City for 
any losses arising out of the performance of the Work. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

42 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



Bautovich & Partners, Inc., conducted an appraisal of the 
Library Parcel and the proposed improvements, to be 
developed in accordance with the subject Agreement and 
the Construction Rider, and this appraiser valued the 
Mission Bay Branch Library at $3,300,000, or $130,350 
less than the not to exceed purchase price of $3,430,350 
under the subject Agreement. Mr. Dunn notes that 
although the not to exceed price of $3,430,350 is 3.95 
percent higher than the appraised valued of $3,300,000, 
the not to exceed purchase price is consistent with the 
Real Estate Division's opinion of the Library Parcel value. 

5. The proposed ordinance waives Chapters 6 and 12 of 
the San Francisco Administrative Code related to public 
works and contracting issues, including 
nondiscrimination requirements. According to Mr. Choy, 
the requirements of Chapters 6 and 12 of the 
Administrative Code do not apply to this transaction 
because the City neither owns the land that is being 
developed nor is entering into any of the design or 
construction contracts for the development of the Branch 
Library improvements. Mr. Choy states that the explicit 
wavier in the proposed Ordinance is to avoid any 
confusion as to the applicability of Chapter 6 and 12 to 
this project. 

The proposed subject Agreement requires the payment of 
Prevailing Wages and contains standard non- 
discrimination provisions. The Redevelopment Agency 
will require Mercy to comply with the Redevelopment 
Agency's Equal Opportunity Program. According to Ms. 
Sims, the Redevelopment Agency's Equal Opportunity 
Program includes the Equal Benefits Ordinance of the 
City and County of San Francisco. 

6. Under the proposed Agreement's Construction Rider 
(Exhibit D), the City can terminate the Agreement in the 
event that the purchase price presented at the end of the 
design phase exceeds $3,430,350. According to Ms. 
Hildreth, the estimated costs to design the Mission Bay 
Branch Library would be between $100,000 and $150,000. 
According to the Agreement, the City would be 
responsible for the design costs incurred by the 
Redevelopment Agency for the Branch Library as well as 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

43 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



for the costs to redesign the Parcel for another use, not to 
exceed the Library Parcel's design costs. Therefore, the 
estimated cost payable by the Public Library to the 
Redevelopment Agency for the Public Library to 
terminate the Agreement would range from an estimated 
$200,000 to $300,000, but could exceed $300,000 based on 
the actual costs to design the Library Parcel. However, a 
not to exceed dollar amount to terminate the Agreement 
between the Redevelopment Agency and the City is not 
specified in the Agreement. The source of funds to 
terminate the Agreement would be the Public Library's 
2000 Branch Library Faculties Improvement Bonds, 
according to Ms. Hildreth. 

7. Under the proposed Agreement, the Public Library 
could proceed with the purchase of the Mission Bay 
Branch Library for a price exceeding $3,430,350, without 
first obtaining Board of Supervisors approval. 

8. Attachment III to this report, provided by Mr. George 
Nichols of the Library, explains that while the Library 
has not yet developed a detailed operating budget for the 
Mission Bay Branch Library, the Library has budgeted a 
.5 FTE in the FY 2002-2003 budget for a Librarian II 
position, and plans to make this position fulltime in its FY 
2003-2004 budget. This position would be responsible for 
the Mission Bay Branch Library budget and related 
responsibilities. Mr. Nichols states that the operating 
costs for the Mission Bay Branch Library would be funded 
by the Library Preservation Fund 5 . According to Mr. 
Nichols, a preliminary estimate for the operating costs of 
the Mission Bay Branch Library is $383,000 annually. 

9. The subject Agreement authorizes the Director of 
Property to make certain modifications and take certain 
actions in furtherance of this Ordinance that do not 
materially decrease the benefits to the City with respect 



5 The City Charter specifies that the Library Preservation Fund, approved by the voters as Proposition E in 
1994, shall receive a minimum (baseline) appropriation amount from the General Fund, and such required 
baselines are adjusted by changes in the General Fund discretionary revenues. The Library Improvement Bond 
Fund monies are from the voter-approved 1988 Library Improvement Bond for $109,527,000. Mr. Nichols 
advises that of the original 1988 Library Improvement Bonds, $102.5 million was expended on the Main 
Library, and $4,831,284 was expended on the Branch Libraries for a total expenditure of approximately 
$107,331,284. Of the $4,831,284 expended on Branch Libraries, $359,641 for the Mission Branch, $1,826,506 
for the Chinatown Branch, $1,005,066 for the Sunset Branch, $999,071 for the Park Branch and $641,000 for 
the Presidio Branch. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

44 



Memo to Finance Committee 

October 2, 2002 Finance Committee Meeting 



to the property and do not materially increase the 
obligations or liabilities of the City, without Board of 
Supervisors approval. According to Mr. Choy, this 
provision does not authorize the Director of Property to 
make changes that materially change the Agreement. Mr. 
Choy states that this provision is included in order to 
allow the Director of Property to have the flexibility make 
minor revisions all related documents without first 
obtaining Board of Supervisors approval. 



Recommendations: 



1. Amend the proposed Ordinance to require the Public 
Library to obtain separate Board of Supervisors approval 
if the purchase price of the Mission Bay Branch Library 
were to exceed $3,430,350. 



cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 



2. Amend the Ordinance to state that approval of the 
Board of Supervisors requires that the Agreement be 
amended to establish a not to exceed cost payable by the 
Public Library to the Redevelopment Agency with respect 
to the Public Library's potential termination of the 
proposed Agreement with the Redevelopment Agency. 
This not to exceed cost could be $300,000 based on the 
estimated not to exceed cost of $150,000 for the design of 
the Branch Library, plus $150,000 for the Redevelopment 
Agency's redesign of the Parcel for some other use 
($150,000 plus $150,000 equals $300,000) or some other 
not to exceed amount as determined by the Finance 
Committee. 

3. Approval of the proposed ordinance, as amended, is a 
policy decision for the Board of Supervisors. 




farvey M. Rose 



7L 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

45 



Attachment ! 



MISSION CREEK LIBRARY 




Development Cost Summary 








Library construction 




Core & shell: 


1,016,681 


Tenant imprvmts: 


1,342,203 


Gen'l conditions, OH&P 


incl in above 


Subtotal 


2,358,884 


Construction: contingency: 


235,888 


Total Construction 


2,594,772 










Total Development Costs 




1 Site-related 


1,912 


2. Financing 


221 


3. Owner/Developer 


22,129 


4. Design & Engineering 


328,015 


5. Permits & Fees 


22,951 


6. Construction (incl 10% cntngncy) 


2,594,772 


7. Property Mgmt-related 


- 


Project admin 


297,000 


Total Development Costs 


3,267,000 



Sniirr.P'. RoHoulonnr 



46 



Attachment ?. 
Pagel of 8 



SUMMARY 

On August 15, 2000, the Redevelopment Agency Commission approved Catellus' Major 
Phase Application for Blocks N3-N4a in Mission Bay North. Pursuant to the terms of the 
Mission Bay North Owner Participation Agreement between the Agency and Catellus 
("OP A"), Block N3a contains the next Agency Affordable Housing Parcel, Parcel 1 of 
Block N3a (the "Site"). As required by the Agency's Mission Bay Affordable Housing 
Policy, the Agency issued a Request for Qualifications ("RFQ") on August 29, 2000, 
seeking nonprofit teams capable of developing and operating a 130-140 unit senior rental 
development on the Site for very low income households and related commu ni ty and 
co mm ercial space. 

The Redevelopment Agency received Statements of Qualifications ("SOQs") from two 
nonprofit development teams by the response deadline. They are (1) Citizens Housing 
Corporation (CHC) in partnership with Northern California Presbyterian Homes & 
Sendees (NCPHS) as property manager and the Goldman Institute on Aging (GIA) as 
service provider, and (2) Mercy Housing California (Mercy) in partnership with Mercy 
Services Corporation and North & South of Market Adult Day Health (NSM) as service 
provider. 

An interdiscip linar y evaluation panel of Agency and City staff ("Evaluation Panel") 
reviewed the SOQs submitted by both teams and found that while both teams exceed the 
minimum qualifications established by the RFQ, the Mercy Team was most qualified to 
develop the Site. 

The Request for Qualifications 

On August 29, 2000, the Agency issued the RFQ requesting SOQs from qualified teams 
comprised of a nonprofit housing development corporation, a property management 
agent, a senior service provider and a design architect, to develop and operate 130-140 
units of affordable senior rental housing and related space on the Site as described in 
more detail below: 

• 130-140 residential units serving a mixture of frail and independent seniors; 

• Shell space for the Mission Bay Branch Library ("Library") located on the ground 
floor, not to exceed 10,000 square feet; 

• Shell space for neighborhood-serving retail located on the ground floor, not to 
exceed 5,000 square feet; 

• Shell space for an Adult Day Health Center ("ADHC") located on the ground 
floor for 40-50 full-time clients, approximately 5,000- 6,000 square feet; 

• Shell space for resident-serving nonprofit office space, not to exceed 25,000 
square feet; 

• A dining/food warming facility which can accommodate up to 50 persons to be 
shared between ADHC clientele and the general resident population; 

• Meeting/conference space which can acco mm odate up to 100 persons to be 

47 

Source: Redevelopment Agency. Pam Sims, September 18, 2002. 



Attachment 2 
Page 2 of 8 



shared between the ADHC, the Library, the senior housing, and the co mmunit y; 
and 
• Additional co mmuni ty facilities adequate to meet the needs of the senior 
population. 

The RFQ and the proposed uses of the Site were developed in consultation with the 
Director of the Mayor's Office of Housing and the City's Consolidated Plan, as required 
by the Policy, and with representatives from Department of Public Health and the San 
Francisco Public Library. In addition, the C ommis sion on Aging and the Mayor's Office 
of Community Development were also consulted. 

Because of the prominence of the Site and the requirement for a distinctive design for the 
Library, the Agency required the submittal of a limited number of architectural drawings 
to demonstrate that each prospective developer has a thorough understanding of the 
development constraints and to obtain a sense of the approach that each would be take to 
designing the Site. The selected developer will submit Basic Concept and/or Schematic 
Drawings to the Commission for its approval at a later date. The Agency also required 
the submission of a pre limin ary financing plan to determine that the developer 
understands the financing programs and mechanisms adequately to work with Agency 
staff in developing an actual financing plan after selection. 

Developer Responses 

The Agency received SOQs from two nonprofit development teams by the response 
deadline. They are (1) Citizens Housing Corporation (CHC) in partnership with Northern 
California Presbyterian Homes & Sendees (Presbyterian Homes) as property manager 
and the Goldman Institute on Aging (Goldman) as service provider, and (2) Mercy 
Housing California (Mercy) in partnership with Mercy Services Corporation and North & 
South of Market Adult Day Health (NSM Adult Day Health) as service provider. The 
following is a summary of the development teams: 



48 

Source: Redevelopment Agency, Pam Suns, September 18, 2002. 



Attachment 2 
Page 3 of 8 



Developer Name 


CHC 


Mercy 


Property Manager 


NCPHS 


Mercy Services 


Service Provider 


Goldman Institute on Aging 


NSM Adult Dav Health 


Design Architect 


David Baker & Michael Willis 


Hardison Komatsu Ivelich & Tucker 



The following is a summary of basic facts about the development concepts of each team 
in comparison with the guidelines in the RFQ 




RFQ Guidelines 


CHC 

Development Plan 


Mercy 
Development Plan 


Total Units 


130-140 


216 


139 


Frail Elderly 
Set- Aside 


50 units 


76 units 


50 units 


Location of Frail 
Elderly Units 




Separate Building 


Integrated 


Library Space 


10 : 0000 


10,000 s.f. 


10.000 s.f. 


Nonprofit Office SF 


Max 25,000 s.f. 


16,608 s.f. 


18.000 s.f. 


Retail S.F. 


Max 5.000 s.f. 


3,500 s.f. 


4,000 s.f 


Dining, Meeting 
and Conference 


Adequate to serve 
>150 people 


5,200 s.f. 


7,000 s.f. 


Parking Spaces 


Max 1 space/5 units 
+ adequate loading 


22 


31 


Construction Type 




5-8 Floors Tota 
Type I / Type V 


5 Floors Total 
Type V over Type I 


Developer's three 
(3) Comparable SF 
Developments 




1. Fell Street Apts. 

2. Coleridge Park 

3. O'Farrell Towers 


1 . Presentation 
Senior 

2. 1 1 1 Jones Street 

3. The Rose Hotel 



Selection Criteria 

The RFQ described the following selection criteria: 

1) Successful experience developing comparable rental developments in San 
Francisco in terms of: 

• Construction type and design; 

• Low Income Tax Credit and/or tax-exempt bond financing; 

• Senior housing (preferably frail and non-frail); 

• Inclusion of retail and commercial space; and 

• Other type developments with a density over 50 units per acre in San 
Francisco . 

2) Successful operating and property management experience with: 

• Developments of similar size and configuration to the Site; 

• Low Income Tax Credit and/or tax-exempt bond-financed developments; 

• Senior housing developments frail and non-frail); 



Source: Redevelopment Agency, Pam Sims, September 18, 2002. 



49 



Attachment ? 
Page 4 of 8 



• Retail and commercial space with comparable density; and 

• Other type developments with a density of over 50 units per acre in San 
Francisco . 

3) Development team staff qualifications and capacity/workload. 

4) Successful experience of the Adult Day Health Center operator/service 
provider in providing supportive services at facilities similar to the proposed 
ADHC and focusing on the assistance of frail elderly with Activities of Daily 
Liviiig or equivalent. 

5) Strength and constructability of design concept and the qualifications of 
Architectural Design Team and experience in comparable new construction 
developments. 

6) Appropriateness of development and financing plans. 

7) Ability to meet or exceed the goals of the Equal Opportunity Program. 
Evaluation Process 

The developer selection evaluation panel consisted of the following persons: 

Marcia Rosen, Director, Mayor's Office of Housing 

Marc Trotz, Director of Housing Development, Department of Public Health 

Donna Corbeil, Chief of Branches, SF Public Library 

Anna Yee, Director of Planning, Mayor's Office of Community Development 

Pedro Arce, Planning Department Mission Bay Liaison 

Amy Neches, Mission Bay Senior Project Area Manager 

Penny Nakatsu and Andrico Penick, Agency Legal Staff 

Thomas Ma, Agency Senior Architect & Saiful Abedin, Agency Architect 

George Bridges, Agency Contract Compliance Specialist 

Matt Schwartz & Pam Sims, Agency Housing Division 

Alyson Gordon, Special Assistant to the Executive Director 

To evaluate criteria 1, 2 and 4, the quality and comparability of each applicant's 
developments, as well as their design and operations (in San Francisco), the evaluation 
panel reviewed the comparable developments for each developer. To evaluate the 
relative qualifications and capacity of the key staff compared with current workload 
(criteria 3), the evaluation panel analyzed the projected workload of all key team 
member. To evaluate the appropriateness of the development plan, Agency architects 
Thomas Ma and Saiful Abedin and City planner Pedro Arce led the team through a 
detailed analysis of the relative merits of each concept in the context of the requirements 
of the Redevelopment Plan and Design for Development standards. Agency Housing 
staff analyzed the financial plans to insure that each developer demonstrated adequate 
knowledge of the key financial mechanisms proposed. Agency contract compliance staff 



Source: Redevelopment Agency, Pam Sims, September 18, 2002. 



Attachment 2 
Page 5 of 8 



George Bridges reviewed the developers' relative ability to meet or exceed the goals of 
the Equal Opportunity Program based on their past performance in San Francisco as well 
as the information submitted in their responses. 

The evaluation panel then invited developers to a question and answer interview in which 
the team clarified the developers' respective qualifications, plans and assumptions. 
Following the developers interview, the team met several times to evaluate the 
developers' relative merits with respect to each of the criteria from the RFQ. Finally, the 
team reached a consensus as to the relative ranking of the developers. In all, the team 
met a half dozen times in preparing its evaluation. 

Evalnation Results 

1. Successful experience developing comparable rental developments in San Francisco. 

While both teams have development experience in San Francisco, Mercy has developed 
many more comparable developments. Of Mercy's 19 developments in San Francisco, 
eight (8) serve seniors. In addition, its most recently completed senior development, 
Presentation Senior Housing, combines most of the major elements the Agency wishes to 
develop on the Site including a mixture of independent and frail elderly housing, an adult 
day health center, significant community space, and retail space. CHC, on the other 
hand, has not completed any new construction projects in San Francisco as an 
organization. The only senior housing CHC has completed in San Francisco is the 
acquisition last year of an existing 1 1 -unit building in the Tenderloin. CHC is the co- 
developer for Kokoro Assisted Living, but this development has only just started 
construction. Two CHC staff members, including the executive director, have experience 
with comparable developments for their previous employers, but none of these were 
completed in San Francisco in the last five years. For these reasons, the panel concludes 
that Mercy is significantly stronger in this area at this time. 

2. Successful operating and property management experience with developments of 
similar size and configuration to the Site, developments financed by Low Income Tax 
Credit and/or tax-exempt bonds, frail and non-frail senior housing and retail and 
commercial space. 

Although Presbyterian Homes manages two well-respected low-income senior 
developments in San Francisco, Eastern and Western Park Apartments, and recently 
contracted to manage an 86-unit SRO for formerly homeless seniors, the Le Nain Hotel, 
Mercy Services' experience in San Francisco managing 16 low-income developments, 
including four (4) low-income senior developments (All Hallows, Francis of Assisi, 
Monsignor Lyne Community, and Notre Dame Plaza) is broader and deeper. In addition, 
Presbyterian Homes has no experience managing nonresidential space, which will be a 
significant issue in the management of the Site since there will be more than 30,000 s.f. 
of nonresidential space including nonprofit office space, the library, and the retail space. 
Mercy Services also has more experience in working with the requirements of the Low 
Income Housing Tax Credit program. Finally, the panel noted that Mercy Sendees has 



Source: Redevelopment Agency, Pam Sims. September 18, 2002. 



Attachment 2 
Page 6 of 8 



an additional advantage as operator/manager in that it has many years of experience 
working with its development partner, Mercy Housing, and with its proposed sendee 
provider, NMS Adult Day Health, which should minimiz e coordination issues. 

3. Development team staff qualifications and capacityAvorkload. 

While both teams have strong development staffs and are very busy with other projects, 
Mercy's staff is deeper and appears to have more capacity given its workload at this time 
than CHC, which is still a relatively new organization with a small staff. The four Mercy 
development staff listed in the SOQ all have four (4) or more years experience (40 years 
combined) developing comparable low-income developments in San Francisco. The two 
CHC development staff listed in the CHC SOQ also has four or more years experience 
developing comparable low-income projects in San Francisco, although their combined 
experience is significantly less at 16 years. In addition, CHC stated in its SOQ that it 
planned to rely on two consultants (only one of whom was named) to provide part of its 
development staff for the project. 

4. Successful experience of the Adult Day Health Center operator/service provider in 
providing supportive services at facilities similar to the proposed ADHC and focusing 
on the assistance of frail elderly with Activities of Daily Living or equivalent. 

The evaluation panel found that both service providers are highly qualified to deliver 
services to the proposed population. While the Goldman Institute has greater institutional 
and financial resources at its disposal and has a number of many innovative ideas, NMS 
Adult Day Health has the advantage of having recently planned and completed the 
development of a similar facility, Presentation Senior Community, with its proposed 
development partner, Mercy. The panel was also impressed with NMS Adult Day 
Health's approach to integrating the frail elderly with the more independent seniors by 
offering a package of flexible services of varying levels of intensity that allow residents 
to age in place. 

5. Strength and constructability of design concept and the qualifications of Architectural 
Design Team and experience in comparable new construction developments. 

The evaluation panel spent a considerable amount of time analyzing the relative merits of 
both team's design concepts, as illustrated in the conceptual architectural plans and 
narratives included in each submission. While both design teams are well-qualified on 
paper, the design concepts proposed by the two teams are si gnifi cantly different in a 
number of respects including building height, massing, and material choices and left the 
panel with different conclusions in the context of this prominent Agency site. 

The panel found that a portion of a building along Fourth Street designed by CHC's 
architects, David Baker and Michael Willis, did not comply with the Mission Bay North 
Design for Development standards. Specifically, the Baker/Willis concept calls for an 
eight-story 84-foot tall building adjacent to Mission Creek despite the fact that the Design 
for Development only allows structures of not more than 65 feet within 100 feet of 



Source: Redevelopment Agency, Pam Sims, September 18, 2002. 52 



Attachment 2 
Page 7 of 8 



Mission Creek. On the other hand, the panel liked the Baker/Willis approach of artfully 
comb inin g several buildings of differing heights, orientation, and design into a cohesive 
senior campus. The panel found that the Baker/Willis design concept more successfully 
addressed the design guidelines contained in the RFQ including providing quality useable 
open space, views to Mission Creek and activating the pedestrian mews along the 
southwestern edge of the Site. The panel also like the distinctive design concept 
developed by Baker/Willis for the Library. 

While the evaluation panel was impressed by the ability of the Mercy/HKIT approach to 
incorporate all of the land uses into a single five-story building, the panel was unanimous 
in finding the HKTT concept to be less distinctive. In particular, the panel felt that the 
HKTT concept as presented lacked adequate differentiation in massing (particularly on 
the Berry Street frontage), proposed using materials in proportions that would be difficult 
and expensive to construct, presented a less efficient ground floor circulation plan, and 
failed to provide quality useable open space. The panel was also concerned that the 
HKTT concept did not succeed in providing the Library with a distinctive design as 
requested by the RPQ. 

The Mission Bay Citizens Advisory Committee (CAC) also reviewed the two designs and 
expressed a strong preference for the Baker/Willis concept. The CAC found the HKTT 
design to be unattractive and not in keeping with the quality of design of other Mission 
Bay developments. In conclusion, although a portion of the Baker/Willis design concept 
violates the Design for Development standards, the panel found that the Baker/Willis 
team would be more likely to develop a higher quality, distinctive design for this 
prominent site. The Panel reco m mended that, in the event the Agency selects Mercy as 
the developer, Mercy be required to develop a fundamentally new design concept. 

6. Appropriateness of development and financing plans. 

Both teams exhibited adequate knowledge of the key financial mechanisms that will be 
used in developing the Site although there was variation among the estimates of cost and 
subsidy required. The panel concluded that much of the variation stems from differences 
in assumptions rather than significantly different knowledge or experience. These 
variations are less important at this stage because the selected developer will work 
closely with Agency staff to create the most cost-effective financing plan possible. 

7) Ability to meet or exceed the goals of the Equal Opportunity Program. 

Staff found that both teams have complied with the Agency's Equal Opportunity Program 
and that there is not a significant difference between the teams on this point. 



Source: Redevelopment Agency, Pam Sims, September 18, 2002. 53 



Attachment ? 
Page 8 of 8 



September 25, 2002 



TO: Elaine Forbes, Budget Analyst 
Budget Analyst's Office 



FR George Nichols, Finance Director 
San Francisco Public Library 



RE: MISSION BAY OPERATING COSTS 



The Mission Bay Branch Library is projected to open sometime in FY 2004-05. Operational costs will be 
borne by the Library Preservation Fund, the Library's main source of fun din g for the programs and sendees 
it provides. Although the branch library won't be fully operational until 2004-05, the Library is pl anning to 
add staff- in a phased approach -beg inning in FY 2003-04. This staff will be in addition to a Librarian H 
position approved in the current year budget to assist in space and operational planning in advance of the 
opening of the branch library. 1 In addition, the Library in FY 2004-05 will budget funds to cover common 
area charges (CAM), program materials and supplies, and other operating expenses to support the operation 
of the branch. In reviewing the staffing needs of the Mission Bay Branch Library we plan on looking 
carefully at opportunities to temporarily redirect existing staff from other branch libraries that will be 
closed for renovations as part of the Branch Library Improvement Bond Program Augmenting the 
Library's budget to cover operating costs for the new branch library will of course be subject to review and 
approval by the Board of Supervisors through the annual appropriation ordinance. 



1 The Librarian II (3632) is a full-time position with a budgeted start date of January 1, 2003. Funding fot 
the position was appropriated in the 2002-03 AAO. 



Attachment 3 



September 25, 2002 



TO: Elaine Forbes, Budget Analyst 
Budget .Analyst's Office 



FRj George Nichols. Finance Director 
San Francisco Public Library' 



RE: MISSION BAY OPERATING COSTS 



The Mission Bay Branch Library is projected to open sometime in FY 2004-05. Operational costs will be 
bome by the Library Preservation Fund, the Library's main source of funding for the programs and sendees 
it provides. Although the branch library won't be fully operational until 2004-05, the Library is planning to 
add staff- in a phased approach -beginning in FY 2003-04. This staff will be in addition to a Librarian II 
position approved in the current year budget to assist in space and operational planning in advance of the 
opening of the branch library. 1 In addition, the Library in FY 2004-05 will budget funds to cover c ommo n 
area charges (CAM), program materials and supplies, and other operating expenses to support the operation 
of the branch. In reviewing the staffing needs of the Mission Bay Branch Library we plan on looking 
carefully at opportunities to temporarily redirect existing staff from other branch libraries that will be 
closed for renovations as pan of the Branch Library Improvement Bond Program. 

We are at the beginning stage of scoping the budget for programs and sendees at the branch that drive 
staffing and other operational costs at the new branch library. Our plan is to begin including these costs in 
our budget request for FY 2003-04 if appropriate. At this point in time we estimate that once fully 
operational, staffing will consist of 1.0 FTE Librarian II (3632), 1.0 FTE Librarian I (3630) 2 , 1.0 FTE 
Librarian Technician (3616), 1.0 FTE Librarian Assistant (3610), and 1.5 FTE Library Pages (3602) 3 . We 
es tima te ongoing staffing costs at 5300,000 annually. In addition we are estimating operating costs of 
533,000 annually for CAM utility, telecommunications, and program materials and supphes. We also 
estimate ongoing purchases for new and replacement materials for the branch collection (e.g., books, 
audio/visuaL periodicals, etc.) at S50,000 annually 4 . Based on this very preliminary' assessment, the annual 
cost of operating this branch would be around 5383,000. 

Augmenting the Library's budget to cover operating costs for the new branch library will of course be 
subject to review and approval by the Board of Supentisors through the annual appropriation ordinance. 



1 The Librarian II (3632) is a full-time position with a budgeted start date of January 1, 2003. Funding for 
the position was appropriated in the 2002-03 AAO. 

2 Children's Librarian. 

3 Consists of four 15 hour/week page positions. 

4 Allocation for the Mission Bay Branch Library would be budgeted as part of the Library's system-wide 
budget for books and materials. 

55 



City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 
Clerk: Gail Johnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102^1689 



Wednesday, October 09, 2002 



12:30 PM 
Regular Meeting 



City Hall, Room 263 



Members Present: Aaron Peskin, Chris Daly, Sophie Maxwell. 



MEETING CONVENED 



The meeting convened at 12:34 p.m. 
021579 [Prevailing Wage] 

Resolution fixing the highest general prevailing rate of wages for various crafts and kinds of labor, and for 
janitorial services, as paid for similar work in private employment in the City and County of San Francisco, at 
the rates certified to the Board by the Civil Service Commission on September 16, 2002. (Civil Service 
Commission) 

(No Public Benefit Recipient.) 

9/25/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Janet Bosnich. Compensation Manager, 
Department of Human Resources, Employee Relations Division; Kate Favetti, Executive Officer, Civil Ser\>ice 
Commission. 

RECOMMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021296 [Entertainment Commission] 
Supervisor Newsom 

Ordinance amending the San Francisco Administrative Code to (i) enact a new Section 10.100-296 establishing 

the San Francisco Entertainment Commission Fund, and (ii) amend Section 90.9 of Chapter 90 relative to the 

fees for licenses and permits issued by the San Francisco Entertainment Commission. 

7/22/02, RECEIVED AND ASSIGNED to Finance Committee. (9/13/02 - Referred to Small Business Commission for comment and 

recommendation.) 

9/13/02, REFERRED TO DEPARTMENT. Referred to Small Business Commission for comment and recommendation. 

Heard in Committee. Speakers: Supervisor Leno; Ben Rosenfield. Mayor's Budget Office. 
CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 



Printed ar 1 1 :46AM on 3.3/04 



Finance Committee Meeting Minutes October 9, 2002 



021458 |Amend Police Code Section 1070.16] 
Supervisors Leno, Daly, Gonzalez 

Ordinance amending San Francisco Police Code Section 1070.16 to allow adults over the age of 18 into after 
hours premises. 

NOTE: This action requires two-thirds vote. The Board may not amend the ordinance and may only vote in 
favor or in opposition to the veto override. 

The Board of Supervisors must act on the veto override within 30 days of the date of the veto. The Mayor 
vetoed the Ordinance on November 15, 2002. Therefore, the Board will loose the ability to override the veto 
unless it votes on the veto override on or before December 15, 2002. 

(November 15, 2002 - Returned disapproved by Mayor; 
November 18, 2002 - Consideration scheduled for November 25, 2002.) 

8/19/02, ASSIGNED UNDER 30 DAY RULE to Public Works and Public Protection Committee, expires on 9/18/2002. 
9/19/02, TRANSFERRED to Finance Committee. (10/10/02 - Referred to Youth Commission for comment and recommendation.) 
Heard in Committee. Speakers: Supervisor Leno; Ben Rosenfield, Mayor's Budget Office; John Wood, 
Legislative Analyst, San Francisco Late Night Coalition; Terrence Allen, San Francisco Late Night Coalition; 
Kathy Peck, Executive Director, Hearing Education and Awareness for Rockers (H.E.A.R.); Frederick 
Hobson. District 6 Democratic Club; Liam Shy, local DJ; Richard Roebuck; Dr. Stephen Ellis; Theodore 
Lakey, Deputy City Attorney. 
Supervisor Daly added as co-sponsor. 
RECOMMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021459 (Amend Police Code Sections 1060.28 and 1070.27) 
Supervisors Leno, Daly, Gonzalez 

Ordinance amending San Francisco Police Code Sections 1060.28 and 1070.27 to require places of 
entertainment and after hours premises with a dance floor and a capacity of 500 persons or more to provide or 
sell at a reasonable cost earplugs to patrons. 

8/19/02, ASSIGNED UNDER 30 DAY RULE to Public Works and Public Protection Committee, expires on 9/18/2002. 
9/19/02, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Supervisor Leno; Ben Rosenfield, Mayor's Budget Office; John Wood, 
Legislative Analyst, San Francisco Late Night Coalition; Terrence Allen, San Francisco Late Night Coalition; 
Kathy Peck, Executive Director, Hearing Education and Awareness for Rockers (H.E.A.R.); Frederick 
Hobson, District 6 Democratic Club; Liam Shy, local DJ; Richard Roebuck; Dr. Stephen Ellis; Theodore 
Lakey, Deputy City Attorney. 
Supervisor Daly added as co-sponsor. 
RECOMMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 2 Printed at 11:46 AM on 3/3/04 



Finance Committee 



Meeting Minutes 



October 9, 2002 



021460 IAmend Police Code Sections 1060.5 and 1070.5] 
Supervisors Leno, Daly 

Ordinance amending San Francisco Police Code Section 1060.5 and 1070.5 to require 30 days notice of permit 
application for place of entertainment and after hours premises. 

8/19/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 9/18/2002. (9/13/02 - Referred to Small Business 
Commission for comment and recommendation.) 

Heard in Committee. Speakers: Supervisor Leno; Ben Rosenfield, Mayor's Budget Office; John Wood, 
Legislative Analyst, San Francisco Late Night Coalition; Terrence Allen, San Francisco Late Night Coalition; 
Kathy Peck, Executive Director, Hearing Education and Awareness for Rockers (H.E.A.R.); Frederick 
Hobson, District 6 Democratic Club; Liam Shy, local DJ; Richard Roebuck; Dr. Stephen Ellis; Theodore 
Lakey, Deputy City Attorney. 
Supervisor Daly added as co-sponsor. 

Amended on page 2, line 3, and on page 4, line 6, after "days, " by adding the following: "Notice of such 
hearing shall be mailed by the Chief of Police at least 30 days prior to the date of such hearing to any person 
who has filed a written request for such notice. " 
AMENDED. 

Ordinance amending San Francisco Police Code Sections 1060.5 and 1070.5 to require 30 days notice of 
permit application for place of entertainment and after hours premises. 
RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021461 [Amend Police Code Section 1024) 
Supervisors Leno, Daly, Gonzalez 

Ordinance amending Section 1024 of the San Francisco Police Code to remove references to "moral character" 
of applicant and to allow Chief of Police to consider criminal and permit history of applicant in determining 
whether to grant or deny application. 

8/19/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 9/18/2002. (9/13/02 - Referred to Small Business 
Commission for comment and recommendation.) 

Heard in Committee. Speakers: Supervisor Leno; Ben Rosenfield, Mayor's Budget Office; John Wood, 
Legislative Analyst, San Francisco Late Night Coalition; Terrence Allen, San Francisco Late Night Coalition; 
Kathy Peck, Executive Director, Hearing Education and Awareness for Rockers (HE. A. R.J; Frederick 
Hobson, District 6 Democratic Club; Liam Shy, local DJ; Richard Roebuck; Dr. Stephen Ellis; Theodore 
Lakey, Deputy City Attorney. 
Supervisor Daly added as co-sponsor. 
RECOMMENDED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 



Printed at ll:4t> AM 



Finance Committee 



Meeting Minutes 



October 9, 2002 



021315 [Contracting out Janitorial Services] 

Resolution concurring with the Controller's Certification that janitorial services can be practically performed at 

the Asian Art Museum under private contract at a lesser cost than similar work performed by employees of the 

City and County. (Asian Arts Commission) 

7/29/02, RECEIVED AND ASSIGNED to Finance Committee. 

8/21/02, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Dr. Emily Sano, Director, Asian Art Museum; 

Monique Zmuda, Deputy Controller; Linus Black; Rebecca Miller, SEIU, Local 790; Andre Spearmon, SE1U, Local 790; Ben Rosenfield, 

Mayor's Budget Office. 

Continued to 9/25/02. 

9/25/02, CONTINUED. Speakers: None. 

Continued to 10/2/02. 

10/2/02, CONTINUED. Speakers: None. 

Continued to 10/9/02. 

Speakers: None. 

TABLED by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 



021507 [Appropriation for janitorial staff at the Asian Art Museum] 
Supervisor Daly 

Ordinance appropriating $243,889 from the General Fund Reserve and reappropriating $247,000 in 
professional services for a total of $490,889 for janitorial staff for the Asian Art Museum for fiscal year 2002- 
03. 

(Fiscal impact.) 

8/26/02, RECEIVED AND ASSIGNED to Finance Committee. 
Speakers: None. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021529 [Public Employment - Asian Art Museum] 
Supervisor Daly 

Ordinance amending Annual Salary Ordinance 2002/03 reflecting the creation of eight positions (7.5FTEs) at 
the Asian Art Museum. 

(Fiscal impact; Companion measure to File 021507.) 
8/26/02, RECEIVED AND ASSIGNED to Finance Committee. 
Speakers: None. 
CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 



Printed at 11 :46 AM on 3/3/04 



Finance Committee Meeting Minutes October 9, 2002 



021310 [PUC contract with Primus Infrastructure and Jacobs Civil Inc. for program management services.] 
Supervisor Peskin 

Hearing regarding the Public Utilities Commission's progress toward implementing its contract with Primus 
Infrastructure and Jacobs Civil Inc. for program management services. 
7/22/02, RECEIVED AND ASSIGNED to Finance Committee. 
9/25/02, CONTINUED. Speakers: None. 
Continued to 10/9/02. 

Heard in Committee. Speakers: Patricia Martel, General Manager, Public Utilities Commission; Ken Bruce, 
Budget Analyst's Office; Don Birrer; Lisa Feldstein, Policy Analyst, International Federation of Professional 
and Technical Engineers (Local 21); David Novogrodsky, Executive Director, International Federation of 
Professional and Technical Engineers (Local 21); Karen Cubic, CI P Manager, Public Utilities Commission. 
FILED by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 



ADJOURNMENT 



The meeting adjourned at 2:40 p.m. 



City and County of San Francisco 5 Primed at 1 1:46 AM on 3/3/04 



I 

7 



CITY AND COUNTY 




[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



OF SAN FRANCISCO 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 

October 3, 2002 



TO: -Finance Committee 

FROM: , Budget Analyst 

SUBJECT: Qctober 9, 2002 Finance Committee Meeting 






Item 1 - File 02-1579 



Department: 



Item: 



Description: 






DOCUMENTS DBPT. 
OCT 8 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



Civil Service Commission 
Department of Human Resources 

Resolution fixing the highest general prevailing rate of 
wages for construction 1 and janitorial services for 
contractors of the City to pay their employees, at the rates 
certified to the Board by the Civil Service Commission on 
September 16, 2002 (Civil Service Commission File No. 
0675-02-1). 

Administrative Code Section 6.22 requires that City 
contractors, which have been awarded contracts for public 
works or improvement projects pay their employees the 
highest prevailing wage rates 2 . In addition, in May of 
1999, the Board of Supervisors amended Section 21.25-1 
of the City's Administrative Code to require that City 
contractors awarded contracts by the City to perform 
janitorial services at facilities owned or leased by the 



1 Construction and construction related work is referred to in the Administrative Services as various 
crafts and kinds of labor. 

2 Prevailing rate of wage is the rate of compensation being paid to a majority of workers engaged in a 
specified category of craft or labor. 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 



City, have a provision in the contract that requires the 
contractor to pay their employees who perform such 
janitorial services at wage rates which are not less than 
the prevailing rate of wages as determined by the Civil 
Service Commission and approved by the Board of 
Supervisors. 

Section 6.22 requires that the Board of Supervisors, at 
least once during each calendar year, fix and determine 
the highest general prevailing rate of wages, including the 
rate of wages for overtime and holiday work, paid in 
accordance with the Charter Section 7.204. The proposed 
resolution would establish the highest prevailing rate of 
wages which City contractors are required to pay their 
employees for work performed under a City contract for 
construction and janitorial services work. 

In accordance with Section 6.22, to assist the Board of 
Supervisors in determining the prevailing rate of wages, 
the Civil Service Commission is required to furnish to the 
Board of Supervisors, on or before the first Monday of 
November of each year, data as to the highest general 
prevailing rate of wages as paid by private employers for 
construction and construction related work and for 
janitorial services work done in San Francisco. Section 
6.22 states that the Board of Supervisors is not limited to 
the data submitted by the Civil Service Commission in 
determining the prevailing rate of wages, but may 
consider other information on the subject as the Board of 
Supervisors deems proper. 

The Civil Service Commission has provided the Board of 
Supervisors with the following data for determining the 
highest general prevailing rate of wages: (a) the General 
Prevailing Wage Determination Survey conducted by the 
Director of Industrial Relations of the State of California 
for construction and construction related work, (b) the 
existing agreement, in effect through November 30, 2003, 
between Parking Employers and Teamsters Automotive 
Employees, Local 665 for Garage Attendants 3 and (c) the 



3 According to Ms. Molly Stump of the City Attorney's Office, in March of 1989, the Board of 
Supervisors amended the City's Administrative Code to include the operation of off-street-parking 
lots or garages under the term "public work or improvements" as defined by Section 6.33 in order to 
provide prevailing wages to Garage Attendant employees of contractors operating in City-owned or 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
2 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 



existing agreement effective August 1, 1999 through July 
31, 2003, between San Francisco Maintenance contractors 
Association and the Service Employees International 
Union (SEIU), Building Service Employees Local 87 for 
Janitors and Custodians. 



Comment: 



A copy of the data submitted to the Board of Supervisors 
by the Civil Service Commission on September 16, 2002, 
as to the highest general prevailing rate of wages paid by 
private employers to construction and construction 
related employees and janitors for work done in San 
Francisco is on file with the Clerk of the Board of 
Supervisors. A list of the work types covered in the data 
submission is attached to this report. 



Recommendation: 



Approval of the proposed resolution is a policy matter for 
the Board of Supervisors. 



leased garages. However, in 1999 the Board of Supervisors amended Chapter 6 of the 
Administrative Code and deleted references to employees working in off-street parking lots and 
garages owned or leased by the City. Ms. Stump made the Civil Service Commission aware that 
garage attendants are no longer covered and as a consequence, the Civil Sendee Commission did not 
certify the prevailing rate of wage for parking attendants. However, data related to parking 
attendants is included in the data that the Civil Service Commission has submitted to the Board of 
Supervisors and in the Attachment to this report. 

BOARD OF SUPERVISORS 



BUDGET ANALYST 



Attachment 
General Prevailing Wage Determination made the Director of Industrial Relations, State of California 



Asbestos Removal Worker (Laborer) 



Asbestos Worker, Heat and Frost Insulator 



Boilermaker-Blacksmith 



Brick Tender 



Bricklayer, Blocklayer 



Carpenter 



Carpet, Linoleum 



Cement Mason 



Dredger (Operating Engineer) 



Drywall Installer (Carpenter) 



Electrical Utility Lineman 



Electrician 



Elevator Constructor 



Field Surveyor 



Glazier 



ron Worker 



Janitors* 



Laborer 



Landscape Maintenance Laborer 



Light Fixture Maintenance 



Marble Finisher 



Marble Setter 



Operating Engineer 



Operating Engineer (Building Construction) 



Operating Engineer (Heavy and Highway Work) 



Operating Engineer (Landscape Construction) 



Painter 



Parking and Highway Improvement Painter (Laborer) 



Parking and Highway Improvement Painter (Painter) 



Parking Garage Attendants* 



Pile Driver (Carpenter) 



Pile Driver (Operating Engineer- Building Construction) 



Pile Driver (Operating Engineer - Heavy and Highway Work) 



Plaster Tender 



Plasterer 



Plumber 



Roofer 



Sheet Metal Worker (HVAC) 



Slurry Seal Worker 



Stator Rewinder 



Steel Erector and Fabtricator (Operating Engineer - Heavy & Highway Work) 



Steel Erector and Fabtricator (Operating Engineer- Building Construction) 



Teamster 



Telecommunications Technician 



Telephone Installation Worker 



Terrazzo Worker 



Tile Finisher 



Tile Setter 



Traffic Control/Lane Closure (Laborer) 



Tree Trimmer (line clearance) 



Tunnel Worker (Laborer) 



Tunnel/Underground (Operating Engineer) 



Water Well Driller 



* occupational categories added at the request of the Board of Supervisors 



-ME0002B.xls 



Source: Department of Human Resources 

4 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

Item 2 - File 02-1296 



Item: 



Ordinance amending the San Francisco Administrative 
Code to (i) enact a new Section 10.100-296 establishing 
the San Francisco Entertainment Commission Fund, and 
(ii) amend Section 90.9 of Chapter 90 relative to the fees 
for licenses and permits issued by the San Francisco 
Entertainment Commission. 



Description: 



The proposed ordinance would establish the San 
Francisco Entertainment Commission Fund (Fund) as a 
"category four fund" under the provisions of Article XIII of 
the Administrative Code. Under Article XIII of the 
Administrative Code, monies deposited into a category 
four fund earn interest on the principal, which is then 
credited to the Fund. Expenditure of all monies in this 
Fund would require appropriation approved by the Maj*or 
and the Board of Supervisors. Those monies in a category 
four fund that remain unexpended and unencumbered at 
the end of the fiscal year are carried forward to the next 
fiscal year. 

In July of 2002, the Board of Supervisors approved an 
ordinance establishing the San Francisco Entertainment 
Commission, effective on July 1, 2003, by adding a new 
Chapter 90 to the Administrative Code (File 02-0783). At 
that time the Board of Supervisors also approved 
submission to the voters for the November 5, 2002 
election of a Charter Amendment (Proposition F) 
establishing the composition and appointment of 
members to the Entertainment Commission (File 02- 
0805). 

If approved by the San Francisco voters, the Charter 
Amendment would stipulate that the San Francisco 
Entertainment Commission, as of Jury 1, 2003, would 
consist of seven members, four appointed by the Mayor 
and three appointed by the Board of Supervisors. In the 
event that Proposition F is not approved by the voters, the 
San Francisco Entertainment Commission would become 
effective July 1, 2003 with the Mayor appointing all of the 
members of the Commission, as currently provided for all 
Commission appointments in the City Charter. The City 
Charter states that the Mayor shall "make appointments 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 



to boards and commissions whicb shall be effective 
immediately and remain so, unless rejected by a two- 
thirds vote of the Board of Supervisors within 30 days 
following transmittal of Notice of Appointment," unless 
otherwise specifically provided. 

The proposed ordinance provides that all monies payable 
to the City for "entertainment-related permits," as defined 
in Chapter 90 of the Administrative Code, and any other 
permits or licenses that are or may come under the 
jurisdiction of the Entertainment Commission, would be 
deposited into the Fund, as of July 1, 2003. All fines paid 
for violations of provisions of the San Francisco Police 
Code relating to "entertainment-related permits" would 
also be deposited into the Fund. Under the proposed 
ordinance, expenditures from the Fund may be used only 
for Entertainment Commission costs, including 
administrative costs pursuant to Section 10.194 of the 
Administrative Code. 

Chapter 90 of the Administrative Code currently provides 
that the Entertainment Commission must submit an 
annual report to the Mayor and the Board of Supervisors 
which includes (a) an analysis of the fee revenue 
generated from the issuance, renewal and processing of 
applications for entertainment-related permits, and (b) 
fee proposals for the purpose of covering the annual 
operating costs of the Commission. The current Chapter 
90 language also provides that "within three years of the 
operative date of the Article, "the Board of Supervisors 
shall establish fees for entertainment-related permits at 
levels sufficient to cover the estimated annual operating 
costs of the commission." 

This proposed ordinance would also amend Chapter 90 of 
the Administrative Code to add a provision that the 
Entertainment Commission is required, as part of the 
aforementioned annual report to the Mayor and the Board 
of Supervisors, to review and analyze on an annual basis: 
(a) the existing fee structure for entertainment-related 
permits, (b) new permits related to cultural, 
entertainment, and/or athletic events and venues as may 
be proposed by the Commission, (c) graduated fees for 
entertainment-related permits, and (d) other related 

BOAKD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 



Comment: 



Recommendation: 



matters appropriate for the Commission to become 
financially self-sustaining. 

Four ordinances amending San Francisco Police Code 
(Items 3 through 6, Files 02-1458, 02-1459, 02-1460 and 
02-1461) will also be heard by the Finance Committee at 
the October 9, 2002 meeting. 

• File 02-1458 would amend Police Code Section 1070.16 
to allow adults over the age of 18 into after hours 
premises. Currently, the Police Code provides that no 
person under 21 years of age is allowed into after 
hours premises. 

• File 02-1459 would amend Police Code Sections 
1060.28 and 1070.27 to require places of 
entertainment and after hours premises with a dance 
floor and a capacity of 500 persons or more to provide 
or sell at a reasonable cost earplugs to patrons. 

• File 02-1460 would amend Police Code Sections 1060.5 
and 1070.5 to require 30 days public notice related to 
hearings for a permit application for places of 
entertainment and after hours premises. Currently, 
the Police Code requires 10 days notice for hearings on 
permit applications. 

• File 02-1461 would amend Police Code Section 1024, to 
remove references to "moral character" of permit 
applicants and to allow the Chief of Police to consider 
criminal history and prior permits of applicants for 
permits in determining whether to grant or deny 
permits to such applicants. Currently, the Police Code 
requires applicants to furnish evidence of "good moral 
character" and provides that the Chief of Police 
consider "moral character" as a factor in issuing or 
granting a permit. 

Since the proposed ordinances do not have fiscal impact, 
the Budget Analyst has not prepared a report pertaining 
to these other four proposed ordinances. 

Approval of the proposed ordinance is a policy matter for 
the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

Item 7 - File 02-1315 

Note: This item was continued from the October 2, 2002 Finance Committee 
Meeting. 



Department: 
Item: 



Services to be 
Performed: 

Description: 



Comments: 



Asian Art Museum 

Resolution concurring with the Controller's certification 
that janitorial services at the Asian Art Museum can be 
practically performed by a private contract at a lower cost 
than similar work services performed by City and County 
employees. 

Janitorial services at the Asian Art Museum 

Charter Section 10.104 provides that the City may 
contract with private firms for services that can be 
practically performed for a lower cost than similar work 
performed by City employees. 

The Controller has determined that contracting for 
janitorial services at the Asian Art Museum for FY 2002- 
03 would result in estimated savings as follows: 





Lowest 


Highest 




Salary 


Salary 


Citv-Operated Service Costs 


Step 


Step 


Salaries 


$441,559 


$522,290 


Fringe Benefits 


138,536 


151,227 


Equipment 


10,284 


10,284 


Total 


$590,379 


$683,801 


Contractual Services Cost* 


(372,527) 


(372,921) 


Estimated Savings 


$217,852 


$310,880 



* The Contractual Services Cost difference is due to the inclusion of 
City contract monitoring costs at the lowest and highest salary steps. 

1. The Asian Art Museum closed its operations at its 
Golden Gate Park facility on October 7, 2001 and will 
reopen at its new Civic Center facility in January of 2003. 
In the past, the M.H. de Young Museum and the Asian 
Art Museum used to be located in the same building in 
Golden Gate Park. Janitorial services for the shared 
portions of the Golden Gate Park facility, including the 
entry way and the restrooms, were provided by 2.0 FTE 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

8 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 



2708 Custodian positions and funded in the Fine Arts 
Museum budget. Mr. Steve Dykes of the Fine Arts 
Museum reports that the 2.0 FTE 2708 Custodian 
positions that provided janitorial services for the shared 
portions of the Golden Gate Park facility continue to be 
included in the Fine Arts Museum budget. Mr. Dykes 
further reports that these two positions currently provide 
janitorial services at the Palace of the Legion of Honor. 

In addition to the 2.0 FTE 2708 Custodian positions 
included in the Fine Arts Museum budget, for the past 
nine years, the Asian Art Museum Foundation has paid 
approximately $55,000 per year for a janitorial services 
contract for the upkeep of the Asian Art Museum exhibit 
space and administrative offices at the Golden Gate Park 
facility, according to Ms. Ikuko Satoda of the Asian Art 
Museum. According to Ms. Satoda, the janitorial services 
contract for upkeep of Asian Art Museum space at the 
Golden Gate Park facility, paid for by the Asian Art 
Museum Foundation, was terminated when the Asian Art 
Museum closed its operations at its Golden Gate Park 
facility in October of 2001. In the attached memorandum 
(Attachment I), Ms. Satoda provides additional 
information on the provision of custodial services at the 
Asian Art Museum. 

Ms. Satoda advises that the janitorial services contract for 
upkeep of the Museum's new Civic Center facility is 
anticipated to begin on November 1, 2002. Therefore, the 
Fiscal Year 2002-03 Asian Art Museum budget includes 
funding of $247,000 for eight months of a janitorial 
services contract. 

2. The Contractual Services Cost used for the purpose of 
the analysis is based on (a) the Asian Art Museum's 
estimated FY 2002-03 costs to provide janitorial services 
for a full 12 months based on the associated workload at 
the new Civic Center facility and the industry standards 
for the cost of providing such janitorial services, and (b) 
the salary and fringe benefits at the lowest and highest 
salary steps of 0.25 FTE 7120 Buildings and Grounds 
Maintenance position at the Asian Art Museum to 
monitor the contract. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



REVISED (10/4/02) 
Memo to Finance Committee Item 7 - File 02-1315 

October 9, 2002 Finance Committee Meeting " 

3. According to Ms. Emily Sano of the Asian Art 
Museum, the Department would issue a Request for 
Proposals (RFP) for the Asian Art Museum's janitorial 
services contract immediately upon approval of the 
subject resolution. 

4. Attachment II, provided by the Asian Art Museum, is 
the Controller's supplemental questionnaire, with the 
responses from the Asian Art Museum. 

5. Item 8, File 02-1507 in this report to the Finance 
Committee is a supplemental appropriation ordinance for 
$490,889. On an annual basis, the estimated cost to 
conduct janitorial services on an in-house Civil Service 
basis is at least $500,000 which is $127,079 or 34 percent 
more than the proposed contract amount of $372,921 
included in the Controller's subject proposed certification. 
Item 9, File 02-1529 is a companion amendment to the 
Annual Salary Ordinance to create ten new in-house Civil 
Service custodian positions for the Asian Art Museum. 
Therefore, this proposed resolution (File 02-1315), to 
approve the Controller's certification that janitorial 
services at the Asian Art Museum can be performed at a 
lower cost by a private contractor than by in-house Civil 
Service positions is a policy matter for the Board of 
Supervisors since the Board is also considering to have 
such janitorial services conducted on an in-house Civil 
Service basis instead of contracting out such services. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. ' 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

10 



Attachment I 



Asian Art Museum of San Francisco 
Memorandum 



TO: Anna LaForte. Budget Analyst Office 

FROM: Ikuko Sato da, Asian Art Museum 

DATE: August 13. 2002 

Re: Custodial Services 



This memo is in response to your question regarding the City's responsibility in 
maint ainin g the City's new building. Asian Art Museum. 

For its entire existence the Asian Art Museum has relied on the promise of the City 
Charter (Sec. 16.106) to maintain the integrity of the Museum and its collections. For 
most of our history, the City contribution to security, custodial and building maintenance 
was part of the Fine Arts Museums' budget and to be performed by civil service 
employees. Nine years ago. due to the budget reduction and adhiinistrative oversight, the 
funds for services provided to FAM by the City were significantly reduced, and one 
custodial position for the AAM w r as eliminated. In order to maintain the bunding at 
Golden Gate Park at an acceptable level, the Asian Art Foundation has been 
supplementing the custodial services by engaging outside janitorial sendees for several 
years. 

Since we are opening a newly renovated facility, which has been paid for largely with 
private funds as a gift to the City and County of San Francisco, we were assured 
continuing City support to resume the responsibility of maintaining the City's brand new 
building by appropriating the costs of custodial services again to the Asian Art Museum, 



11 



Attachment II 
CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

DEPARTMENT: Asian .Art Museum 



CONTRACT SERVICES: _Janitorial Services. 
CONTRACT FERIOD: One Year 



(1 ) Who performed the activity/service prior to contracting out? 
N/A since the facility is brand new, 

(2) How many City employees were laid off 2s a result of contracting out? 
None 

(2) Explain the disposition of employees if they were not laid off. 
N/A 

(4) What percentage of City employees' time is spent of services to be contracted out? 
N/A 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contrasting out? 

Never up to now. It will be ongoing request 

(S) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent 
year? 

FY 02-Q3 will be the first year. 

(7) How will the services meet the goals of your M5EAV5E Action Plan? 

Meet MEE raquirament. 

(8) Does the proposed contractor provide health insurance fur its employees? 

Assumed "yes" since the vendor is on the City approved list. 

(5) Does the proposed contractor provide benefits to employees with spouses? If so, are the same benefits 
provided to employees with domestic partners? If not, how does the proposed contractor comply with the 
Domestic Partners ordinance? 

Assumed "yes" since the vendor is on the City approved list, 

(10) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 

Assumed "yes" sines the vendor is on the City approved list, 

Department Representative: _lkuko Satoca 

Telephone Number: 415-557-6813 



12 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

Items 8 and 9 - Files 02-1507 and 02-1529 



Department: 
Items: 



Amount and 
Source of Funds: 



Budget: 



Description: 



Asian Art Museum 

File 02-1507: Supplemental appropriation ordinance 

for $243,889 from the General Fund Reserve and 
reappropriating $247,000 in professional services for a 
total of $490,889 to provide for in-house Civil Service 
janitorial services at the Asian Art Museum. 

File 02-1529: Ordinance amending the Fiscal Year 

2002-2003 Annual Salary Ordinance to create ten 1 new 
positions (7.5 FTEs) at the Asian Art Museum to provide 
for in-house Civil Service janitorial services. 



$243,889 
$247.000 



$490,889 



General Fund Reserve 

Reappropriation from professional services 

included in the Fiscal Year 2002-2003 budget 

of the Asian Art Museum 

Total 



The following table shows the estimated costs of providing 
janitorial services at the Asian Art Museum in Fiscal 
Year 2002-03 beginning on October 1, 2002. 





Costs Contained in 




Proposed Ordinance 


Permanent Salaries 


$326,550 


Temporary Salaries 


17,466 


Premium Pay 


3,940 


Overtime 


9,154 


Mandatory Fringe Benefits 


77,429 


Other Current Services 


56.350 


TOTAL 


$490,889 



Additional information on the above budget is contained 
in the Description Section of this report. 

The Asian Art Museum closed on October 7, 2001 and will 
reopen at its new Civic Center facility in January of 2003. 



1 The title of the proposed ordinance, File 02-1529, incorrectly states that eight new positions would 
be created. The correct number of new positions is ten. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

According to Ms. Ikuko Satoda of the Asian Art Museum, 
the Asian Art Museum's art collection will be moving from 
a storage facility to the new Civic Center facility 
beginning on October 17, 2002. The proposed ordinance, 
File 02-1529, would amend the Fiscal Year 2002-2003 
Annual Salary Ordinance to reflect the creation of ten 
new custodial positions (7.5 FTEs based on an October 1, 
2002 hire date) for the Asian Art Museum. File 02-1507 
would authorize a supplemental appropriation in the 
amount of $490,889, including $243,889 from the General 
Fund Reserve and $247,000 from monies previously 
appropriated by the Board of Supervisors in the 
Department's Fiscal Year 2002-2003 budget for 
contractual services. Such funds would be used by the 
Asian Art Museum to hire ten new positions (7.5 FTEs), 
and to pay for related expenses to provide janitorial 
services for the Asian Art Museum on an in-house Civil 
Service basis instead of contracting out such janitorial 
services as is being proposed under Item 7, File 02-1315 
contained in this report to the Finance Committee. 

Specifically, the Department is requesting the following: 

Permanent Salaries ($326.550) 

Funds have been requested to hire ten new positions (7.5 
FTEs) at the lowest salary step with a hire date of 
October 1, 2002. However, the Department now 
anticipates filling the ten new positions as of November 1, 
2002 at the highest salary step, resulting in a net 
decreased need of $27,952, from $326,550 to $298,598. 
Ms. Satoda explains in the attached memorandum 
(Attachment I) that the Department is now requesting 
that the ten new positions be hired at the highest salary 
steps instead of at the lowest salary steps as originally 
requested because the Department anticipates that "The 
custodial positions would most likely be filled by transfers 
from other departments with salaries higher than the 
starting salary rate." 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

14 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 



The following table shows the annual cost of the 
requested 10 positions at Step 1 and Step 5: 



No. of 

Annualized 

Positions 


Classification 


Title 


Step 1 
(Biweekly- 
Annual) 


Step 5 
(Biweekly- 
Annual) 


8 


2708 


Custodian 


$1,381 
$36,044 


$1,674 
$43,691 


1 


2716 


Custodial 
Assistant 
Supervisor 


$1,517 
$39,594 


$1,840 
$48,024 


1 


2718 


Custodial 
Supervisor 


$1,670 
$43,587 


$2,028 
$52,931 



Based on Fiscal Year 2002-2003 salary data, the annual 
cost of the requested 10 positions would range from 
$456,986 at Step 1, including salaries of $371,533 and 
mandatory fringe benefits of $85,453, to $554,094 at Step 
5, including salaries of $450,483 and mandatory fringe 
benefits of $103,611. 

Temporary Salaries ($17.466) 

As previously noted, the Asian Art Museum's art 
collection will be moving from a storage facility to the new 
Civic Center facility beginning on October 17, 2002. Ms. 
Satoda states in the attached memorandum (Attachment 
II), "The Museum's security staff and engineering staff 
will take over the building and help secure the City's 
collection. Preparation for the move, clean up after the 
move and maintenance of the building will need to begin 
by October 17, 2002." Although the proposed ordinance, 
File 02-1507, includes $17,466 for Temporary Salaries, 
according to Ms. Satoda, the Museum is now requesting 
$29,816 in Temporary Salaries or $12,350 more than the 
original request, including $16,755 for the move period of 
October 17, 2002 through October 31, 2002 and $13,061 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 



for temporary staff to clean up after evening events at the 
Asian Art Museum throughout Fiscal Year 2002-03. 

Premium Pay ($3.940) 

According to the provisions of the City's Memorandum of 
Understanding for Local 790, janitorial staff would be 
paid 8% more than the base rate for each hour worked 
between 5:00 p.m. and 7:00 a.m. and 10% more than the 
base rate for each hour worked between the hours of 
midnight and 7:00 a.m. The Department is now 
requesting $4,422 for premium pay, an increase of $482 
over the amount included in the proposed ordinance of 
$3,940. Ms. Satoda explains in Attachment I, "All prior 
premium pay and overtime calculations were done using 
the low end of the salary ranges. Both premium and 
overtime were recalculated using the high end of the 
salary ranges." 

Overtime ($9.154) 

According to Ms. Satoda, the original request of $9,154 in 
overtime expenses was based on eight holidays during 
which the Asian Art Museum would be closed to the 
public but janitorial services would be needed. The 
Department is now requesting $10,859, an increase of 
$1,705 over the amount included in the proposed 
ordinance based on the cost of Overtime at the highest 
salary step instead of at the lowest salary step. 

Mandatory Fringe Benefits ($77.429) 

According to Ms. Satoda, the Department calculated 
Mandatory Fringe Benefits at a rate of 23 percent for 
Permanent Salaries, Premium Pay and Overtime, and 
calculated Mandatory Fringe Benefits at a rate of 7.6 
percent for Temporary Salaries. The decreased amount 
now being requested for Permanent Salaries offset by the 
increased amount now requested for Temporary Salaries 
results in a decreased need for Mandatory Fringe Benefits 
of $2,971, from $77,429 to $74,458. 

Other Current Services ($56.350) 

This $56,350 request for Other Current Services includes 
funds for janitorial equipment and supplies. Ms. Satoda 
reports that the Department is now requesting $69,494, 
an increase of $13,144. Ms. Satoda states in Attachment 
II, "The equipment and supplies request increased by 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

16 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

$13,144 after we obtained a better cost estimate of the 
equipment needed for the custodial and janitorial 
services." This total revised request of $69,494 includes: 

• Custodial equipment for cleaning the floors at an 
estimated cost of $53,794. According to Ms. Satoda, 
such equipment has a useful life of 3 to 5 years. 

• Custodial products including various cleaning 
solutions at an estimated cost of $2,150. 

• Custodial supplies at an estimated cost of $13,550. 

Comments: 1. File 02-1529 amending the Fiscal Year 2002-2003 

Annual Salary Ordinance incorrectly includes the 
creation of eight positions (7.5 FTEs). The FTE count of 
7.5 FTEs is based on a hiring date of October 1, 2002 for 
the ten new positions. However, the Asian Art Museum 
now anticipates a hiring date of November 1, 2002 for ten 
new positions, not eight new positions. Based on a hiring 
date of November 1, 2002, the ten positions would 
represent 6.7 FTEs in Fiscal Year 2002-2003 and not 7.5 
FTEs. The Budget Analyst therefore recommends that the 
Fiscal Year 2002-2003 Annual Salary Ordinance be 
amended to reflect the creation of ten positions 
representing 6.7 FTEs. In addition, File 02-1507 
authorizing a supplemental appropriation in the amount 
of $490,889 for janitorial services at the Asian Art 
Museum on an in-house Civil Service basis should be 
amended to reflect the appropriation of funds for 6.7 FTEs 
instead of 7.5 FTEs. 

2. File 02-1529 amending the Fiscal Year 2002-2003 
Annual Salary Ordinance incorrectly includes the 
creation of six 2708 Custodian positions (6.0 FTEs) 
instead of the correct number of eight such positions (5.36 
FTEs). The Budget Analyst therefore recommends that 
the proposed ordinance be amended to state that the 
ordinance would create eight 2708 Custodian positions 
instead of six such positions. In addition, File 02-1507 
should be amended to reflect the appropriation of funds 
for 5.36 FTE 2708 Custodian positions instead of 6.0 
FTEs in this position. 

3. File 02-1529 amending the Fiscal Year 2002-2003 
Annual Salary Ordinance incorrectly includes the 
creation of one 2716 Custodial Assistant Supervisor (0.75 
FTE) and one 2718 Custodial Supervisor (0.75 FTE). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

17 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

Based on a hiring date of November 1, 2002, these two 
new positions would represent 0.67 FTE per position in 
Fiscal Year 2002-2003, not 0.75 FTE per position. The 
Budget Analyst therefore recommends that the proposed 
ordinance be amended to reflect the creation of one 2716 
Custodial Assistant Supervisor (0.67 FTE) and one 2718 
Custodial Supervisor (0.67 FTE). In addition, File 02- 
1507 should be amended to reflect the appropriation of 
funds for one 2716 Custodial Assistant Supervisor (0.67 
FTE) and one 2718 Custodial Supervisor (0.67 FTE) 
instead of 0.75 FTE for such positions. 

4. The Budget Analyst questions the Asian Art Museum's 
ability to fill the ten new positions by November 1, 2002 
because the proposed ordinances require two readings at 
the full Board of Supervisors and then requires approval 
by the Mayor. In addition, the Budget Analyst questions 
the need for the Asian Art Museum to hire all ten new 
positions at the highest salary step. Therefore some 
salary savings should result. In addition, the Budget 
Analyst notes that no salary savings have been factored 
into the requested budget to account for normal attrition. 
Therefore, the Budget Analyst recommends an additional 
reduction of 10% or $29,860 in Permanent Salaries, from 
$298,598 to $268,738, and a corresponding reduction of 
10% or $7,446 in Mandatory Fringe Benefits, from 
$74,458 to $67,012. The Budget Analyst further 
recommends an increase of 10% or $2,982 in Temporary 
Salaries, from $29,816 to $32,798, to provide funding to 
the Department for janitorial services to account for any 
delay in hiring the ten new permanent janitors. 

Recommendations: 1. In accordance with Comment Nos. 1, 2 and 3 above: 

(a) amend line 3 of the proposed ordinance, File 02-1529, 
to reflect the creation of ten positions (6.7 FTEs) 
instead of the creation of eight positions (7.5 FTEs). 

(b) Amend line 16 of File 02-1529 and amend line 3, page 
3 of File 02-1507 to reflect the creation of eight 2708 
Custodian positions (5.36 FTEs) instead of six 2708 
Custodian positions (6.0 FTEs). 

(c) Amend line 17 of File 02-1529 and amend line 4, page 
3 of File 02-1507 to reflect the creation of one 2716 
Custodial Assistant Supervisor position (0.67 FTE) 
instead of one 2716 Custodial Assistant Supervisor 
position (0.75 FTE). 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

18 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 



(d) Amend line 18 of File 02-1529 and amend line 5, page 
3 of File 02-1507 to reflect the creation of one 2718 
Custodial Supervisor position (0.67 FTE) instead of 
one 2718 Custodial Supervisor position (0.75 FTE). 

(e) Amend line 22, page 2 and line 8 page 3 of File 02- 
1507 to reflect the creation of 6.7 FTEs instead of 7.5 
FTEs. 

2. Amend the proposed ordinance, File 02-1507, to reduce 
the supplemental appropriation from the General Fund 
Reserve by $37,566, from $243,889 to $206,323, and to 
reduce this total request of $490,889 by $37,566 to 
$453,323 as follows: 









Recommended 




Amount 


Amount 


Increase 




Requested 


Needed 


(Decrease) 


Permanent Salaries 2 


$326,550 


$268,738 


($57,812) 


Temporary Salaries 3 


17,466 


32,798 


15,332 


Premium Pay 4 


3,940 


4,422 


482 


Overtime 5 


9,154 


10,859 


1,705 


Mandatory Fringe Benefits 6 


77,429 


67,012 


(10,417) 


Other Current Services" 


56.350 


69.494 


13,144 


TOTAL 


$490,889 


$453,323 


($37,566) 



3. Approval of the proposed ordinances, Files 02-1507 
and 02-1529, to provide for in-house Civil Service 
janitorial services at the Asian Art Museum is a policy 
decision for the Board of Supervisors since the Board of 
Supervisors is also considering to provide such services 
through an outside contract (Item 7, File 02-1315). 



2 See Permanent Salaries Section and Comment No. 4 above. 

3 See Temporary Salaries Section and Comment No. 4 above. 

4 See Premium Pay Section above. 

5 See Overtime Section above. 

6 See Mandatory Fringe Benefits Section and Comment No. 4 above. 

7 See Otber Current Services Section above. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

19 



Attachment I 



Asian Art Museum of San Francisco 
Memorandum 



TO: Anna LaForte, Budget Analyst Office 

FROM: Ikuko Satoda, Asian Art Museum 

DATE: October 2, 2002 

Re: Custodial Services 



This memo is in response to your question regarding the supplemental appropriation for 
janitorial services for maintaining the City's new building, Asian Art Museum. 

Early in the budget process, we were instructed by the Mayor's office that we should 
budget the Security Guards and the custodial positions at the low end of their salary 
ranges. This budget estimate for the security guards was valid since there was no existing 
list of candidates eligible for transfer from other departments. However, there is an 
existing list of candidates for janitors and custodians eligible for transfer from other 
departments. The custodial positions would most likely be filled by transfers form other 
departments with salaries higher than the starting salary rate. The permanent salary and 
the fringe benefit lines in the Supplemental Appropriation Ordinance appears to be 
calculated based on the high end of the custodial salary ranges which more accurately 
reflects the outcome of the hiring process. 

All prior premium pay and overtime calculations were done using the low end of the 
salary ranges. Both premium and overtime were recalculated using the high end of the 
salary range. 

The equipment and supplies request increased by $13,144 after we obtained a better cost 
estimate of the equipment needed for the custodial and janitorial services. Our Building 
Superintendent obtained these higher cost estimates from Michael Hanson, the Custodial 
Services Manger at City Hall. 



F:\FY 2002-03 BudgetvFY 2002-03 City BudgefMnemos and notesMemo to Anna 
LaForte re suppl funding cust 2.doc 2 



Attachment II 



Asian Art Museum of San Francisco 
Memorandum 



TO: Anna LaForte, Budget Analyst Office 

FROM: Ikuko Satoda, Asian Art Museum 

DATE: September 17, 2002 

Re: Custodial Services 



This memo is in response to your question regarding the supplemental appropriation for 
janitorial services for maintaining the City's new building, Asian Art Museum. 

Based on the latest construction schedule, we anticipate the issuance of a temporary 
certificate of occupancy (TCO) by October 17, 2002. With the TCO we will be initiating 
the process of moving the art objects from our Golden Gate Park facility to the new 
building. At the same time, the Museum's security staff and engineering staff will take 
over the building and help secure the City's collection. Preparation for the move, cleanup 
after the move and maintenance of the building will need to begin by October 17, 2002. 

The Museum is asking for funding for temporary personnel as opposed to permanent 
personnel for the period from October 17, 2002 to November 1, 2002. Based on the 
known schedule of supplemental appropriation process we are going through at this point, 
we do not think we have sufficient time to complete the hiring process for all the 
proposed custodial staff by October 17, 2002. 

Prior to the proposed technical adjustment by the Mayor's budget office for funding a 
janitorial services contract, the custodial staff was budgeted to start on October 1, 2002. 
That date was changed to November 1, 2002 when the technical adjustment was 
introduced with an assumption that a contracting firm has the responsibility of planning, 
hiring, and training their own janitorial staff prior to the commencement of the contract. 
The new date should have been October 17 and not November 1, 2002. With our own 
civil service employees, the Museum should start these processes, i.e., hiring & training, 
even sooner, but definitely no later than October 17, 2002. 



F:\FY 2002-03 Budgef FY 2002-03 City Budgef\memos and notes-Memo to Anna 
LaForte re suppl funding cust.doc „ , 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

Item 10 • File 02-1310 

Note : This item was heard and continued by the Finance Committee at its meeting 
of September 25, 2002. The Finance Committee specifically directed the 
Budget Analyst to report on an analysis of program management services 
which was made by the International Federation of Professional and 
Technical Engineers (IFPTE), Local 21, AFL-CIO. 

1. This hearing is to consider the Public Utilities Commission's (PUC) progress 
towards implementing its program management services contract for the PUC's 
$4.6 billion Capital Improvement Program (Contract CS-524). During the second 
year of this contract, as of June, 2002, the contract was terminated with the former 
joint venture contractor, the San Francisco Water Alliance, and was awarded to a 
new joint venture, Water Infrastructure Partners, consisting of Jacobs Civil Inc., 
and Primus Industries, Inc. to continue providing the contracted Project 
Management Office (PMO) support services 1 and the contracted project 
management services 2 . This reassignment was approved by the Board of 
Supervisors on June 17, 2002 (Board Resolution 98-02). 

2. On September 25, 2002, the International Federation of Professional and 
Technical Engineers (IFPTE), Local 21, AFL-CIO, issued a memorandum to the 
Finance Committee providing an analysis of the costs of the subject contract's 
program management services relative to the Capital Improvement Program's 
construction costs. The IFPTE's key conclusions are summarized below. A 
summary memorandum by the IFPTE is provided in Attachment 1 to this report. 

3. The PUC has reviewed the IFPTE analysis. The PUC's detailed response, 
which is summarized below, is shown in a memorandum dated September 30, 2002 
(Attachment 2). 

IFPTE Analysis 

1. The IFPTE has concluded that: 

• Program management costs should be no more than 3 percent of the total 
project costs. 50 percent of program management work should be performed 



1 According to Mr. Sunderjeet Bajwa of the PUC, the PMO task comprises (a) program management 
support and administrative services common to the entire PUC Capital Improvement Program, 
including procedures development and document management support, (b) PUC staff training and 
organizational development, and (c) communication and outreach. 

2 According to Mr. Bajwa, "project management services" are the capital improvement project tasks 
which the Contractor performs once it has received specific task orders from the PUC. These include 
Optioneering (i.e., identifying engineering options to decrease construction costs and improve 
efficiency), conceptual engineering, value engineering, the provision of workload relief during peak 
times, and the provision of as-needed expert advice. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
22 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

by PUC and Department of Public Works (DPW) staff, with the remaining 
50 percent to be performed by Contractor staff. 

• Construction management costs should be no more than 6 percent of the 
construction costs. 50 percent of program management and construction 
management work should be performed by PUC and DPW staff, with the 
remaining 50 percent to be performed by Contractor staff who should focus 
on the most complex, difficult, or extended construction projects such as 
tunnels, dams, and treatment plants. 

• All project management work , which should be no more than 5 percent of 
total project costs, and all repair and replacement work should be 
performed by PUC or DPW staff. 

• The subject contract with Water Infrastructure Partners should be 
extended by three years and three months, so that instead of terminating 
on the current expiration date of September 21, 2004, the contract would 
terminate on December 31, 2007. Such an extension would permit the 
Contractor to provide program management services for the first four years 
of the fully funded Capital Improvement Program. 

• Since the clean water system is not included in the Proposition A water 
revenue bonds, no construction management will be required on clean 
water system capital improvement projects. 

2. According to the IFPTE analysis, the estimated total program and construction 
management costs of the Contractor should be between $19,600,000 and 
$21,589,770 for the four year period CY 2003 through CY 2007, which is less than 
one half the potential maximum cost of the Water Infrastructure Partners contract 
of $45,000,000 over its full, four-year term. The IFPTE therefore states that the 
Water Infrastructure Partners maximum contract amount of $45,000,000 should be 
reduced to an estimated amount of between $19,600,000 and 821,589,770 for the 
four year period CY 2003 through CY 2007. 

3. The IFPTE recommends the following, among several "suggested actions": 

• Reduce the total Water Infrastructure Program Contract to cover no 
more than 50% of the Construction Management and Project 
Management costs, as calculated according to industry standards. That 
would result in a $19,600,000 to $21,589,770 maximum contract 
amount instead of a $45,000,000 maximum contract amount over four 
years as is presently the case. 

• Eliminate any other components of the Water Infrastructure 
Partnership (WIP) Contract. 

• Require any additional, "As-Needed" contractual work to be subject to 
competitive bidding, with WIP partners ineligible to participate due to 
potential conflict of interest. 



BOARD OF SUPERVISORS 
BUDGET^ ANALYST 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

PUC Response 

Mr. Surinderjeet Bajwa of the PUC, has responded to the IFPTE analysis, as shown 
in Attachment 2. In summary, the PUC has reported that: 

• The calculation of program management service costs should be based on 
total installed costs (construction costs plus all soft costs, including program 
management services), rather than just on the PUC's projected yearly cash 
flow which the PUC maintains was used by the IFPTE in its analysis. 

• The construction costs shown in the IFPTE's analysis include five projects 
that are not scheduled to begin until after 2007. At that time, the 
construction management portion of those projects can either be kept in- 
house, contracted out, or partially kept in-house and partially contracted 
out. 

• Construction management costs are typically greater for large construction 
projects than the 6 percent estimate used by the IFPTE. 

• The current PUC scope of work has additional work scope compared to a 
normal program management scope of work. 

• The current contract has two parts: the Project Management Office (PMO) 
and Project Management and Construction (PMC). The PMC part of the 
contract includes construction, technical specialist assistance and needed 
project management support which was not considered by the IFPTE 
analysis in their calculations of the amount required for program 
management and construction management. 

• The Capital Improvement Program (CIP) staffing plan includes 
participation from the other City entities such as DPW and the Airport. 

As compared to the IFPTE cost estimates of $19,600,000 to $21,589,770 maximum 
contract amount, the PUC estimates that the Water Infrastructure Partners 
contract for program management services should cost approximately $48,000,000, 
which is $3,000,000 or 6.7 percent higher than the subject contract's current capped 
cost of $45,000,000 over the four-year period of CY 2003 through CY 2007. 

Comments of the Budget Analyst 

1. The Budget Analyst's review of this matter found that the PUC and IFPTE do 
not differ significantly in terms of the amount of expenditures required for program 
management and construction management in consideration of the $4.6 billion size 
and complexity of the PUC's Capital Improvement Program . As noted above, the 
IFPTE analysis estimates total program management and construction 
management maximum costs for the Contractor of between $19,600,000 and 
$21,589,770 for the four year period CY 2003 through CY 2007. As shown in 
Attachment 2, the PUC estimates that such maximum costs should be 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

24 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

approximately $24,500,000 for just program management and construction 
management services of $48,000,000 for all services provided. 

2. The PUC reports that additional program management services, including project 
management, construction and technical specialist support, and additional services, 
such as organizational development, training and staff development, procedures 
development and development of a diversity program are required under the Water 
Infrastructure Partners contract. The IFPTE reports that none of these services 
should be part of the WIP contract and that the WIP contract should be limited to 
program management services and construction management services. 

3. The Budget Analyst has discussed the magnitude of "soft costs" (including 
program management and construction management) for capital improvement 
projects with management staff of the Department of Public Works, the City 
Architect, the Airport and the Capital Improvement Advisory Committee (CLAC) 
and found that the assumptions used by both IFPTE and the PUC in estimating 
such costs are reasonable and within industry standards. 

4. The Budget Analyst concludes that the major disagreement between the PUC 
and the IFPTE is the extent to which the WIP contract should cover work other 
than program management and construction management. The contract work now 
includes: (a) project management, (b) construction and technical specialist support, 
and (c) additional services such as organizational development, training and staff 
development, procedures development and development of a diversity program, is 
required under the Water Infrastructure Partners contract. The IFPTE maintains 
that such additional work as project management, construction and technical 
specialist support and additional services such as organizational development, 
training and staff development, procedures development and development of a 
diversity program should be eliminated from the WIP contract and that the contract 
should be reduced to cover only program management and construction 
management in support of the PUC's Capital Improvement Program. 

5. The Budget Analyst notes that, in November of 2001, the Board of Supervisors 
directed the PUC to form a Joint Union-City Committee to involve the IFPTE in 
matters concerning the scope of work of the contractor. According to the IFPTE's 
September 30, 2002 memorandum to the Finance Committee, the PUC has not met 
this commitment. The IFPTE states, with regard to the Joint Union-City 
Committee (JUCC): 

The SFPUC has shown flagrant disregard for its commitments under 
the Agreement signed by the General Manager and Local 21 in 
November of 2001, in which the scope of work for the Joint Union-City 
Committee ("JUCC") was described. Acting unilaterally, the SFPUC 
has repeatedly cancelled meetings, refused to address the scope of work 
outlined in the Agreement, attempted to control the agenda of the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

25 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 

JUCC, and has shown little interest in using the JUCC as a forum for 
planning and implementation of the CIP. 

6. When asked to comment on the IFPTE's conclusion concerning the JUCC, Mr. 
Bajwa provided the Budget Analyst with the following statement: 

The Joint Union City Committee was formed last year. The JUCC 

membership includes SFPUC management, Local 21 Leadership and 

staff /Local 21 personnel. 

The Committee originally met approximately every 2 months. 

Subcommittees were formed based on the results of a joint 

brainstorming session held at Local 21 addressing the question "what 

are the impediments to implement the CIP". The top issues identified 

were: 

o Program Controls 

o Hiring 

o Relations with Operations 

o Logistics 

o Process 

Subcommittees met very frequently to resolve SFPUC /UEB issues. 

Some have completed their task; others are still meeting. 

Currently, the JUCC meets the first Tuesday of every month. In 

November, the meetings will be the second Tuesday due to a conflict 

with the election. To the best of my knowledge, SFPUC has not 

cancelled any meeting to date. 

7. Based on our review of this matter, the Budget Analyst concludes that there is 
little or no effective communication between the IFPTE and the PUC. Such 
communication was clearly the intent of the Board of Supervisors when it directed 
the PUC to form the Joint Union- City Committee. The Finance Committee may 
therefore wish to strengthen its directive and instruct the IFPTE and the PUC to 
specifically address, through the JUCC mechanism, the issue of whether or not the 
WIP contract should include the following: 

• project management; 

• construction and technical specialist support; and, 

• additional services such as organizational development, training 
and staff development, procedures development and development of 
a diversity program. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



Memo to Finance Committee 

October 9, 2002 Finance Committee Meeting 



Harvey M. Rose 
cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 




BOARD OF SUPERVISORS 

BUDGET ANALYST 

27 



Novogrodsky & Feldstein-Finance Committee Memo Attachment 1 

SFPUC Capital Improvement Program 
September 25, 2002 

SUMMARY 

■ The WTP contract is designated as being for program management and construction 
management. However, CTP budgets do not reflect industry standards for percentage of 
costs attributed to program management and construction management, but instead 
dedicate much higher percentages of overall budget amounts to these items for the WTP 
contract period. Further, the contract does not factor in the construction management 
capacity and capabilities of the Bureau of Construction Management of the City's 
Department of Public Works ("DPWBCM"). Any work performed by DPWBCM, while 
outsourced from the SFPUC, will stay within the City and will reduce the amount of the 
WTP contract. 

■ City staff can perform construction management for most CTP project components. 
Consultants will only need to be retained for complex, difficult or extended project 
components of the CIP, such as tunnels, dams, and treatment plants. Similarly, at least 
half of all Project Management can and should be performed by City staff. At 
$45,000,000, the WTP contract is for more than twice the approximately $20,000,000 
required if the WTP performs half of all CEP program management and construction 
management, calculated at industry standard percentages. 

■ The scope of the WTP contract is overbroad, including work that can and should be 
performed by City employees. It lacks clear parameters and includes hands-on 
engineering and design work, which is counter to the stated need for Management 
services (These additional services go directly to the SFPUC's position that they will be 
unable to hire staff through the City process). Most distressingly, the contract assumes 
"integration" of PUC and WTP personnel, a recommendation of R.W. Beck that would 
result in the City's increased dependency on consultants. 

■ The WTP contract assumes all four originally planned CTP components (Regional Water, 
Local Water, Clean Water and Hetch Hetchy Power) will be executed under the CIP. 
However, Clean Water is not included in the bond, and the project scope and staffing 
needs are not yet finalized. Until the project scope has been revised, it is impossible to 
determine the proper contract scope. 

■ The WTP has, to date, received only provisional certification from HRC with regards to 
meeting the requirements of San Francisco's Domestic Partner Ordinance. 

■ The SFPUC has argued that its need for outside consultants is based, in large part, on its 
inability to hire, in a timely fashion, the staff needed to undertake the CTP. However, the 
SFPUC has been unable to produce a staffing plan. Andrea Gourdine, Director of Human 
Resources, has stated that she began asking for a staffing plan in 2001, but has not 
received one to date. Departments with engineering resources to lend, including DPW, 
have made similar statements. 

■ SFPUC Contract oversight is inadequate. Currently, task orders issued under a general 
contract require no analysis of whether the Utilities Engineering Bureau ("UEB") has the 
staff capabitity and/or capacity to perform the work, and work can be sole-sourced out 
without being subject to competitive bid. 



Source : International Federation of Professional and Technical Engineers (IFPTE), Local 21, AFL-CIO 

28 



Attachment 2 
Page I of 6 



San Francisco Public Utilities Commission 

1155 Market St., 4th Floor, San Francisco, CA 94103 
Telephone: (415) 554-2457 • Fax: (415) 554-3161 

Email: wberry@sfwater.org • Web: sfwater.org 




MEMORANDU M 



DATE: 

TO: 

FROM: 

SUBJECT: 



September 30, 2002 

Alan Gibson, Board of Supervisors Budget Analyst 
Jeet Bajwa, CIP Group, SFPUC £f^iy^ 
Water Infrastructure Partners Contract 



IFPTE, Local 21 performed analysis of Program Management Costs. The 
assumptions used for project soft costs, are theoretically within industry standards 
for percentages of overall project dollars allocated to different aspects of a project. 
IFPTE, Local 21 has developed two approaches for calculations (one by calculating 
soft costs for each project, and the other by projected CIP Capital Expenditure by 
year.) The projected cost data appears to be from the Long Range Strategic Plan 
for Capital Improvements issued by the SFPUC on January 24, 2002. According to 
the first approach, the four-year estimated cost for a program/Construction 
Management contract is $39.36 million and according to the second approach the 
program management cost is $10 million. 

In our opinion, the amount of services covered under the current Program 
Management contract includes services in addition to those provided under a 
conventional program management contract. Furthermore, the calculation method 
used by IFPTE, Local 21 is based on the yearly projected CIP cost data from the 
above-mentioned CIP report, instead of using "total installed costs'XTIC) 1 as input. 
"Total installed costs" takes into account the fact that when the projects are in 
planning and design phases during the earlier years, a higher portion of the CIP soft 
cost is absorbed. 

The following table shows the soft cost breakdown based on an assumption that the 
total, average soft cost for a project is 30% of the TIC (similar bases as of IFPTE's 
analysis but converted to the soft cost basis): 



Activity 


% Based on TIC 


Converted to 
Percentage of Soft Cost 


Program Management 


3.0 


10.0 


Project Management 


5.0 


16.7 



1 Total Installed Costs (TIC) is defined as hard costs or construction costs plus soft costs including 
program management costs. 



29 



Water Infrastructure Partners Contract 



Attachment 2 
Page 2 of 6 



September 30; 2002 



Construction Management 


6.0 


20.0 


Design 


16.0 


53.3 


Total 


30.0 


100.0 



Program Management Cost Analysis 

In this analysis, total installed costs per project are applied to IFPTE, Local 21's 
second approach in order to determine the yearly cost for the program 
management contract. The Table below shows the Program Management Needs, 
projected CIP cost as shown in IFPTE, Local 21 analysis and also the projected soft 
costs per year calculated from the CIP plan (as listed above, in the initial years the 
project CIP cost will consist of a significant soft cost shown below.) 

As shown in the above table, the Program Management cost is 10% of the soft cost 
or 3% of total installed project costs. 







PROGRAM MANAGEMENT NEEDS 




Year 


Projected CIP 
Cost 


Projected Soft 
Cost - 


Program 
Management 
@ 10% of Soft- 
Cost 


Program 
Management 

Cost CIPCost 


WIP Cost 


2004 


$50,000,000 


$46,100,000 


10% 


$4,610,000 $2,305,000 


$2,305,000 


2005 


$100,000,000 


$77,600,000 


10% 


$7,760,000 $3,880,000 


$3,880,000 


2006 


$150,000,000 


$80,260,000 


10% 


$8,026,000 $4,013,000 


$4,013,000 


2007 


$300,000,000 


$159,840,000 


10% 


$15,984,000 $7,992,000 


$7,992,000 


Total 


$600,000,000 


$363,800,000 


10% 


$36,380,000 $18,190,000 


$18,190,000 



This table shows a total program management cost of $36,400,000. Assuming a 
contractor involvement of 50%, the amount contracted out is $18,200,000. 

The composition of the SFPUC Program Management Contract includes two parts: 
PMO (Program Management Office) and PMC (Project Management, Construction 
and Technical Specialist Support.) On the one hand, PMO is the generic program 
management oversight plus additional services such as organizational development, 
training, procedures development and diversity. On the other hand, PMC involves 
project specific work tasks including: 

• Optioneering (Alternative Analysis) 

• Conceptual engineering 

• Value engineering 

• Relief of workload during peak times 



30 



Attachment 2 
Page 3 of 6 



Water Infrastructure Parsers Contract -3- . September3D, 2D02 



• Availability of experts as the need arises 

Currently, the PMO is less than 50% of the awarded contract value per year. In the 
current contract the approximate value of the PMO is less than $22 million over 4- 
year period beginning in 2001. The remaining contract funding is planned as a PMC 
cost. 

In general, the PMO usually includes program management, project controls 
support, and document management support. In the SFPUC Program Management 
Contract for Water Infrastructure Partners, the following additional services are also 
included: 

• Training and staff development 

• Client organization development and implementation 

• Procedures development 

• Diversity program 

Based on Years 1 and 2 scope of work, the contribution of the above-listed activities 
amounts to a 30% additional cost to the PMO. 

Based on the above calculations the PMO cost is calculated as following: 
PMO Contract Value for the contractor = $18.0 million 

Cost of other services, roughly 30% of the PMO = $6.0 million 

Total PMO Cost = $24.0 million 

Assuming an equal amount for the PMC work = $24.0 Million 

(A conservative approach has been applied) 



That results in a total of $48 million for four years, an amount above the current 
program management contract of $45 million. 



Construction Management Analysis 

The construction management cost is developed upon a similar basis, assuming 
that 70% of the Total Installed Costs are standard for hard costs. Using IFPTE, 
Local 21's approach, 6% of that belongs to construction management. 50% of the 
6% is allotted to SFPUC while the rest is contracted to a Construction Management 
Contractor. 



31 



Water Infrastructure Partners Contract 



Attachment 2 
Page 4 of 6 



September 30; 2002 



Project 



Construction Management Needs 

Total Installed 

Costs Const. Mgt; at 

(TIC)2004- 70% of TIC as 6% of Hard CIP portion of WIP Services 

2007 Hard Costs Costs Const. Mgt. : Needed 



Pipeline Repair Plan & Readiness Imp 


$3,369,860 


$2,358,902 


$202,192 


$101,096 


$101,096 


SVWTP - New Treated Water Reservoir 


$46,978,215 


$32,884,751 


$2,818,693 


$1,409,346 


$1,409,346 


HTWTP short term IMP 


$81,974,044 


$57,381,831 


$4,918,443 


$2,459,221 


$2,459,221 


Alameda Creek Fishery Enhancement 


$6,730,672 


$4,711,470 


$403,840 


$201,920 


$201,920 


San Antonio Pump Station / Emergency Power 


$3,685,640 


$2,579,948 


$221,138 


$110,569 


$110,569 


Adit Leak Repairs(Crystal Springs / Calaveras 
Res) 


$2,194,818 


$1,536,373 


$131,689 


$65,845 


$65,845 


Potrero Heights Reservoir Rehab. 


$9,584,252 


$6,708,976 


$575,055 


$287,528 


$287,528 


Summit Reservoir Rehab. 


$16,189,863 


$11,332,904 


$971,392 


$485,696 


$485,696 


Le Grande Tank Rehab. And Seismic Upgrade 


$2,070,401 


$1,449,281 


$124,224 


$62,112 


$62,112 


Potrero Heights Tank Seismic Upgrade 


$2,048,890 


$1,434,223 


$122,933 


$61,467 


$61,467 


Lincoln Park Tank Seismic Upgrade 


$1,698,144 


$1,188,701 


$101,889 


$50,944 


$50,944 


Lincoln Way Transmission Line 


$11,175,136 


$7,822,595 


$670,508 


$335,254 


$335,254 


Lincoln Park pump Station Upgrades 


$1,942,169 


$1,359,518 


$116,530 


$58,265 


$58,265 


Summit Pump Station Upgrades 


$4,914,444 


$3,440,111 


$294,867 


$147,433 


$147,433 


Crocker Amazon Pump Station Upgrades 


$2,829,123 


$1,980,386 


$169,747 


$84,874 


$84,874 


Groundwater Projects 


$13,705,753 


$9,594,027 


$822,345 


$411,173 


$411,173 


Total: 


$211,091,424 


$147,763,997 


$12,665,485 


$6,332,7430 


$6,332,7430 



$6,300,000 



This table is developed based on the construction costs for the year 2004 thru 
2007. The mega projects (projects over $100 million) are excluded since they are 
scheduled for construction after 2007. A 50% mix of the SFPUC staff and 
Construction Management contractor is assumed in order to achieve integration of 
SFPUC and WIP staff. It also allows time for SFPUC staff to acquire the necessary 
construction industry knowledge and tools. Finally, it provides resource leveling 
(relief during peak work loads) for City staff. This analysis is developed based on 
the construction costs of the projects, which are planned to be completed in the 
next five years and they are all in Year 2003 dollars. 

However, the construction costs shown in IFPTE, Local 21's analysis includes only 
five projects that are not projected to begin until after 2007. At that time, the 
construction management portion of those projects can either be kept in house, 
contracted out, or a combination of both. 



Summary 

The following tables provide comparison between IFPTE and SFPUC's analysis: 



•59 



Water Infrastructure Partners Contract 



Attachment 2 
Page 5 of 6 



September 3D; 2002 



Table 1: IFPTE Approach #1 (Based on Projected CIP Cost for 4 Years) 





IFPTE Estimate 
$ Millions 


SFPUC Estimate 
$ Millions 


PMO Cost 


10.0* 


18.2 


Construction Cost 


9.6** 


6.3** 



* Not based on TIC 

** Comparison is uneven. IFPTE calculation includes the major projects whereas 
the SFPUC calculates the generic construction management cost for the first 4 
years. 

Table 2: IFPTE Approach #2 (Based on Actual CIP Project Costs for 4 Years) 





IFPTE Estimate 
$ Millions 


SFPUC Estimate 
$ Millions 


PMO Contract Value 


39.4 


48.0* 



* SFPUC analysis includes additional services as identified in this analysis. 

Generally, a 3% cost for the Program Management is good for projects involving 
building projects or relatively simple programs. The private industry usually has a 
higher number (5%+) for power and industrial programs. The public sector utility 
programs are even higher and the reason is that it involves the complex 
government work processes, procedures, public responsiveness, communications 
and outreach. 

We checked with the construction contractor in San Diego, one of the reference 
points in IFPTE, Local 21's report. Based on the available information the 
construction management cost is 9.6% instead of 6% (Total program completed to- 
date is $1.26 billion and the construction management cost is $120 million.) 

It is also noted that the SFPUC is working with other City entities such as DPW and 
SFO to identify their staff support in the implementation of the CIP. 



Conclusion: 



The PMO and PMC cost of $48 million is very comparable to the current 
program management contract of $45 million. PMC is very essential need as 
there are projects, which will require significant technical expert support. 

Program Management and Construction Management costs are typically 
greater than the estimate used by the IFPTE for the public sector utility 
programs. 

The current SFPUC scope of work has additional work scope greater than a 
normal program management work. 



Water Infrastructure Partners Contract 



Attachment 2 
Page 6 of 6 



SEKTEMBER30, 2002 



The PMC part of the contract includes construction, technical specialist 
assistance and needed project management support (not considered by the 
IFPTE analysis). 

OP staffing plan includes participation from the other City entities such as 
DPW and SFO 






34 



City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 
Clerk: GailJohnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, October 16, 2002 



12:30 PM 
Regular Meeting 



City Hall, Room 263 



Members Present: Aaron Peskin, Chris Daly, Sophie Maxwell. 



MEETING CONVENED 

The meeting convened at 12:45 p.m. 

021704 [Controller's Report on the City's Annual Budget Process] 
Supervisor Peskin 

Hearing to review the Controller's report on the City's annual budget process, and its findings regarding 
potential improvements to the budget process. 

10/7/02, RECEIVED AND ASSIGNED to Finance Committee. Sponsor requests this item be scheduled for consideration at the October 
16, 2002 meeting. 

Heard in Committee. Speakers: Supervisor McGoldrick; Edward Harrington, Controller; Phil Ginsberg, 
Deputy City Attorney; Adam Van de Water, Office of the Legislative Analyst, Board of Supervisors; Margaret 
Brodkin, Coleman Advocates; Har\>ey Rose, Budget Analyst; Ken Bruce, Budget Analyst's Office; Debra 
Newman, Budget Analyst's Office; Ben Rosenfield, Mayor's Budget Office; Gloria Young, Clerk of the Board. 
Continued to 1 1/13/02. 
CONTINUED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 



Printed at 11-.4S I W ,.» 1 .) 04 



Finance Committee Meeting Minutes October 16, 2002 



021502 [Requiring the Mayor to submit budget estimates, proposed budgets and revenue estimates for selected 
departments by the first working day of May] 
Supervisor McGoldrick 

Ordinance amending Administrative Code Section 3.3 to require agencies, boards and commissions to submit 
budget estimates to the Controller by the 21st of January; require the Controller to consolidate and submit 
budget estimates to the Mayor by the first working day in February; require the Mayor to submit a preliminary 
budget to the Board of Supervisors by the first working day of March, and a proposed budget to the Board of 
Supervisors by the first working day of May; amending Administrative Code Section 3 .4 to reflect the new 
deadline for submission of the Mayor's proposed budget to the Board of Supervisors. 
8/26/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 9/25/2002. 
9/26/02, TRANSFERRED to Rules and Audits Committee. 
10/1/02, CONTINUED TO CALL OF THE CHAIR. 
10/9/02, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Supervisor McGoldrick; Edward Harrington, Controller; Phil Ginsberg, 
Deputy City Attorney; Adam Van de Water, Office of the Legislative Analyst, Board ofSupen'isors; Margaret 
Brodkin, Coleman Advocates; Harvey Rose, Budget Analyst; Ken Bruce, Budget Analyst's Office; Debra 
Newman, Budget Analyst's Office; Ben Rosenfield, Mayor's Budget Office; Gloria Young, Clerk of the Board. 
Continued to 11/13/02. 
CONTINUED by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



020994 [Approve expenditure of funds for emergency contract CW-336E] 
Supervisor Gonzalez 

Resolution approving the expenditure of funds for emergency contract CW-336E in the amount of $441,000 to 
replace variable frequency drives for main lift pumps at the Southeast Water Pollution Control Plant. (Public 
Utilities Commission) 

(Fiscal impact; No Public Benefit Recipient.) 

9/25/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Jon Loiacono, Manager, Environmental 

Engineering for Water Pollution Control, Public Utilities Commission; Theodore Lakey, Deputy City 

Attorney; Edward Harrington, Controller. 

Continued to 11/6/02. 

CONTINUED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



City and County of San Francisco 2 Printed at 1 1:48 AM 



Finance Committee 



Meeting Minutes 



October 16, 2002 



021647 [Federal grant funds of $9,375,000 for building the South Basin Bridge in San Francisco] 
Supervisor Maxwell 

Resolution authorizing the Director of Public Works to accept and expend $9,375,000 in federal 
Transportation Equity Act for the 21st Century (TEA21) Demonstration Funds with required local matching 
funds of $2,344,000 to undertake environmental studies related to the feasibility of building the South Basin 
Bridge in the City and County of San Francisco. 

(Fiscal impact; No Public Benefit Recipient.) 

9/30/02, RECEIVED AND ASSIGNED to Public Works and Public Protection Committee. 

10/4/02, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Stanley Muraoka, Project Manager, Redevelopment Agency; Don Capobres, 

Senior Project Manager, Redevelopment Agency; Tina Olson, Department of Public Works; Harvey Rose, 

Budget Analyst, 

Continued to 1 J/6/02. 

CONTINUED by the following vote: 

Ayes: 2 - Peskin, Daly 

Absent: 1 - Maxwell 



021437 [City Service of Municipal Energy Load] 
Supervisor Maxwell 

Hearing on the PG&E challenges to the City's ability to serve as "municipal load" tenants on City property. 

8/12/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speaker: Theresa Mueller, Deputy City Attorney. 

FILED by the following vote: 

Ayes: 2 - Peskin, Daly 

Absent: 1 - Maxwell 



021236 (Amending Section 110 of the San Francisco Building Code To Increase Fees For Services] 

Ordinance Amending Section 110 of The San Francisco Building Code To Increase Fees For Department of 

Building Inspection Services. (Building Inspection Department) 

7/17/02, RECEIVED AND ASSIGNED to Public Works and Public Protection Committee. (9/13/02 - Referred to Small Business 

Commission for comment and recommendation.) 

8/14/02, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Amy Lee, Assistant Director, Department of 

Building Inspection; Monique Zmuda, Controller's Office; Frank Chili, Director, Department of Building 

Inspection. 

Amendment of the Whole adopted. Amended on page 1 7 by deleting line 21. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



City and County of San Francisco 



Primed at II:JS 11/ on < '< iu 



Finance Committee Meeting Minutes October 16, 2002 



021580 [Accept and expend a gift of $29,259 from the Friends and Foundation of the San Francisco Public 
Library] 

Resolution authorizing the San Francisco Public Library to accept and expend a gift in the amount of $44,342 
from the Friends and Foundation of the San Francisco Public Library to support public programming and 
outreach at Branch Libraries and to continue production of a monthly newsletter to promote programs, services 
and special events offered by the Public Library. (Public Library) 

(No Public Benefit Recipient.) 

9/24/02, RECEIVED AND ASSIGNED to Neighborhood Services and Recreation Committee. 

10/4/02, TRANSFERRED to Finance Committee. 

Heard in Committee. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Hildreth, City 

Librarian. 

Amended as follows: 

On page 1, lines 1 and 5, and on page 2, line 10, by replacing "$44,342" with "$29,259;" 

On page 1, line 21, by replacing "$22,189" with "$14,643;" 

On page 2, line 2, by replacing "$22,153" with "$14,616;" 

On page 2, line 1 1, by replacing "limited term" with "temporary, as needed. " 

AMENDED. 

Resolution authorizing the San Francisco Public Library to accept and expend a gift in the amount of $29,259 

from the Friends and Foundation of the San Francisco Public Library to support public programming and 

outreach at Branch Libraries and to continue production of a monthly newsletter to promote programs, services 

and special events offered by the Public Library. (Public Library) 

(No Public Benefit Recipient.) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



021339 [Financial Information Privacy] 
Supervisors Peskin, Daly 

Ordinance amending the San Francisco Business and Tax Regulations Code to enact a new Article 20 to 

provide for the protection of private financial information. 

7/29/02, ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 8/28/2002. 

Heard in Committee. Speaker: Dorji Roberts, Deputy City Attorney. 

Supervisor Daly added as co-sponsor. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



City and County of San Francisco 4 Printed at 11:48 AM on 3/3/04 



Finance Committee 



Meeting Minutes 



October 16, 2002 



021667 [Fiscal Year 2002-03 California Constitution Appropriations Limit] 

Resolution establishing the appropriations limit for Fiscal Year 2002-03 pursuant to California Constitution 
Article XIII B. (Controller) 

(No Public Benefit Recipient.) 

10/2/02, RECEIVED AND ASSIGNED to Finance Committee. 

Speakers: None. 

Continued to 11/6/02. 

CONTINUED by the following vote: 

Ayes: 2 - Peskin, Daly 

Absent: 1 - Maxwell 



021668 [Agreement of Purchase and Sale of Real Property Located at 190 9th Street, San Francisco] 

Resolution authorizing the execution, delivery and performance of an Agreement of Purchase and Sale for Real 
Estate (along with all exhibits and schedules, the "Purchase Agreement"), between the City and County of San 
Francisco (the "City"), and Ninth and Howard LLC, a California limited liability company (the "Seller"), 
(including certain indemnities contained therein), for the purchase of real property and improvements located at 
190 9th Street, San Francisco, for use as the Support Services Center of the San Francisco Public Library; 
adopting findings under the California Environmental Quality Act; and adopting findings that the conveyance is 
consistent with the City's General Plan and Eight Priority Policies of City Planning Code Section 101.1. (Real 
Estate Department) 

(Public Benefit Recipient.) 

10/2/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Hildreth, City Librarian; Marc 

McDonald, Director of Property, Real Estate Division, Department of Administrative Sennces; Charlie Dunn. 

Real Estate Division, Department of Administrative Services. 

Amended on page 1, line 13, by adding "placing $250,000 on reserve. " Further amended on page 4, line 22, 

by adding the following: 

"FURTHER RESOLVED, That the cost of facility improvements to the subject Property may not exceed 
$250,000, unless separate approval is obtained from the Board ofSupen'isors; and, be it 

"FURTHER RESOLVED, That funds in the amount of $250,000 for telecommunications work are hereby 
placed on reserve, pending submission from the Department of Telecommunications and Information Services 
of budget details, to be released by the Finance; and, be it. " 
AMENDED. 

Resolution authorizing the execution, delivery and performance of an Agreement of Purchase and Sale for Real 
Estate (along with all exhibits and schedules, the "Purchase Agreement"), between the City and County of San 
Francisco (the "City"), and Ninth and Howard LLC, a California limited liability company (the "Seller"), 
(including certain indemnities contained therein), for the purchase of real property and improvements located at 
190 9th Street, San Francisco, for use as the Support Services Center of the San Francisco Public Library; 
adopting findings under the California Environmental Quality Act; and adopting findings that the conveyance is 
consistent with the City's General Plan and Eight Priority Policies of City Planning Code Section 101.1; placing 
$250,000 on reserve. (Real Estate Department) 

(Fiscal impact; Public Benefit Recipient.) 

REFERRED WITHOUT RECOMMENDATION by the following vote: 

Ayes: 2 - Peskin, Daly 
Absent: 1 - Maxwell 



City and County of San Francisco 



Printed at 1I:4S I M 



Finance Committee Meeting Minutes October 16, 2002 



ADJOURNMENT 



The meeting adjourned at 5:05 p.m. 



City and County of San Francisco 6 Printed at 1 1:48 AM on 3/3/04 



1 

i«./o v. 




[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



OF^SAN FRANCISCO 



CITY AND COUNTY 

. BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



TO: ^Finance Committee 

FROM: ^Budget Analyst 



October 10, 2002 

DOCUMENTS C 
OCT 1 6 2002 



SUBJECT: October 16, 2002 Finance Committee Meeting 
y 

Item 2 - File 02-1502 



SAN FRANCISCO 
. Z LIBRARY 



Note: This item was continued to the Call of the Chair at the October 
1, 2002 Rules and Audits Committee Meeting and was then 
transferred to the Finance Committee. 



Departments: 



Item: 



Mayor's Office 
Board of Supervisors 
Controller's Office 

Ordinance amending Administrative Code Section 
3.3 to require agencies, boards and commissions to 
submit budget estimates to the Controller by the 
21 st of January; require the Controller to 
consolidate and submit budget estimates to the 
Mayor by the first working day in February; 
require the Mayor to submit a preliminary budget 
to the Board of Supervisors by the first working day 
of March, and a proposed budget to the Board of 
Supervisors by the first working day of May; 
amending Administrative Code Section 3.4 to 
reflect the new deadline for submission of the 
Mayor's proposed budget to the Board of 
Supervisors. 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

Description: The proposed ordinance would amend the City's 

Administrative Code to move up the various 
deadlines for submission of the annual budget by- 
one month. 

Specifically, each City and County department, 
agency, board or commission is currently required 
to submit their annual budget estimates to the 
Controller's Office by February 21 st of each year. 
Under the proposed ordinance, these annual budget 
estimates would be due from the departments to 
the Controller's Office by January 21 st . 

Currently, the Controller is then responsible for 
consolidating the annual budget estimates and 
transmitting this information to the Mayor by the 
first working day of March . Under the proposed 
ordinance, such budget estimates would need to be 
consolidated and transmitted to the Mayor by the 
first working day of February . 

In FY 2001-02, the Mayor was responsible for 
transmitting a preliminary budget for FY 2002-03 
to the Board of Supervisors by the first working day 
in April of 2002. Under the proposed ordinance, the 
Mayor would be responsible for transmitting a 
preliminary budget for the upcoming fiscal year by 
the first working day in March of each year. 

Currently, the Mayor is responsible for 
transmitting the proposed annual budget, including 
detailed estimates of revenues and amounts 
required to meet bond interest and fixed charges, 
together with the Mayor's budget message and a 
draft annual appropriation ordinance, prepared by 
the Controller by the first working day of June of 
each year. Under the proposed ordinance, the 
Mayor would be responsible for transmitting these 
budget documents by the first working day of May 
of each year. 

The proposed ordinance would also delete the 
current references to the existing timetable for 
budget submissions, which sunset on December 31, 
2002. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

The Board of Supervisors would continue to be 
required to adopt the interim appropriation and 
salary ordinances by June 30 th , and to adopt the 
budget by the last working day of July of each year. 

Comments: 1. This past year, the Mayor was responsible for 

transmitting a preliminary budget for FY 2002-03 
to the Board of Supervisors by the first working day 
of April. In previous years, the Mayor's Office did 
not submit a preliminary budget to the Board of 
Supervisors. The Budget Committee of the Board of 
Supervisors then held 11 public hearings during 
April and May to consider the prehminary budget, 
and conducted 12 Town Hall meetings in the 
Supervisors Districts prior to the submittal of the 
Mayor's proposed budget on June 1 st . As noted 
above, under the proposed ordinance, a preliminary 
budget for the upcoming year would need to be 
transmitted by the Mayor to the Board of 
Supervisors by the first working day of March, or 
one month earlier than this past year. The final 
budget would then need to be transmitted by the 
first working day of May, instead of the first 
working day of June, as has been previously 
required. 

2. The Sponsor's Office of the proposed legislation 
advises that it is essential that the Board of 
Supervisors start their review of the Mayor's 
balanced budget earlier so that the public, the 
Board of Supervisors and the Board's supporting 
departments, including the Budget Analyst's Office 
and the Legislative Analyst's Office, have more 
time to review the budget and provide policy 
analyses. 

3. The preliminary budget estimates for FY 2003- 
2004, as reported on August 13, 2002 by the 
Mayor's Budget Director, the Controller and the 
Budget Analyst, projected a budget shortfall of 
$149 million. Therefore, Ms. Katie Petrucione of 
the Mayor's Office advises that one of the primary 
concerns of the Mayor's Office is it would be 
difficult, especially in tight financial years as the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



FY 2003-04 budget is anticipated to be, for the 
Mayor's Office to reduce the amount of time 
available to balance the City's annual budget 
because there would be (1) less time for actual 
expenditure and revenue data on which to base 
projections, (2) less reliable revenue estimates may 
result in more conservative projections, and greater 
expenditure reductions and/or fee increases than 
might be necessary, (3) greater likelihood of 
technical adjustments and other changes to the 
City's final budget, and (4) Memorandum of 
Understandings for employee compensation would 
not yet have been negotiated. 

4. The Budget Analyst advises that the proposed 
ordinance to move up various dates of the annual 
budget transmittals should not, in and of itself, 
result in additional costs for the City. 

5. On October 1, 2002, the Legislative Analyst's 
Office issued a report which researched the 
potential advantages and disadvantages of a 
biennial (two-year) budget cycle for San Francisco. 
This report included a survey of other jurisdictions 
that use biennial budgeting, legislative and 
implementation concerns and recommendations for 
the Board of Supervisors. The Legislative Analyst's 
Office concluded that enacting a biennial budget 
cycle in San Francisco is a policy matter for the 
Board of Supervisors. 

6. On October 10, 2002, the Controller's Office 
issued findings and recommendations regarding 
potential changes to the City's budget process. The 
Attachment to this report identifies the eight 
recommendations contained in the Controller's 
report. The Controller's report includes (1) a 
recommendation to convert from an annual budget 
process to a two-year budget cycle with annual 
appropriations and (2) a recommendation to change 
the date that the Mayor is required to transmit the 
budget to the Board of Supervisors to May 15, 
instead of June 1, as is the current practice, or May 
1, as is proposed in the subject ordinance. The 
Controller's Office does not recommend changing 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

A 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

any of the other dates of the current budget cycle, 
as is being proposed under this subject ordinance. 
Item 1, File 02-1704 of the Finance Committee's 
October 16, 2002 calendar is a hearing to review 
the entire Controller's report on the City's annual 
budget process and its findings and 
recommendations regarding potential 

improvements to the budget process. 

Recommendation: Approval of the proposed ordinance is a policy 

matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Attachment 



Recommendations to Improve the Board's Budget Process 

Based on these findings, the Controller recommends the following changes: 

• The Board of Supervisors should expand its role in the budget process to include the 
development of policy priorities to guide the budget development; 

• Adjust the Board of Supervisors' staffing either by increasing staff, or by reallocating 
staff and contract personnel and re-assigning workload to shift their work to policy 
analyses; 

• Convert from an annual budget process to a two-year budget with an annual 
appropriation. The first year of a two-year budget should include policy hearings and 
full budget deliberations. The second year budget discussion should be limited to the 
changes proposed by the Mayor's Office to bring revenues in line with expenditures 
and the Board should hold hearings to evaluate departments' program performance. 

• Coordinate with the Mayor and Controller's staff to provide budget information at a 
level that allows the public to understand and participate in policy decisions; 

• Expand the use of the internet, and expand surveying and polling, data mining, and 
the use of the media in order to disseminate budget information; 

• Increase the time that the Board considers the budget by revising the schedule to 
require the Mayor to transmit the budget to the Board of Supervisors on May 15; 

• Redefine the budget amendment process to focus on service delivery rather than on 
increases to individual programs and agencies; 

• Revise the budget amendment process to ensure that technical adjustments and add- 
backs are subject to the same review and approval as the rest of the budget. 



Next Steps 

Once the Board of Supervisors decides on a preferred budget process, the Board should 
draft Jegislation to incqrporate_ the changes to its rules_andjto the Administrative Code. 
The Board should establish a committee structure and appropriate timelines for budget 
hearings and budget deliberations. Finally, the Board should revise its staffing and 
contract personnel, as well as the workload and focus to reflect the changes made to the 
budget process. 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



Item 3 - File 02-0994 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Public Utilities Commission (PUC) 

Resolution approving the expenditure of funds for 
emergency contract CW-336E in the amount of $441,000 
to replace variable frequency drives for main lift pumps at 
the Southeast Water Pollution Control Plant. 

$441,000 

PUC Repair and Replacement Fund. 

The proposed resolution would approve the PUC's 
expenditure of $441,000 for an emergencs^ contract to 
replace the variable frequency drives for the main lift 
pumps at the Southeast Water Pollution Control Plant. 
The PUC ratified the declaration of the emergency on 
August 13, 2002 (PUC Resolution No. 02-0151). 
According to the PUC, the emergency declaration was 
required because the existing variable frequency drives 
for the four main lift pumps at the Southeast Water 
Pollution Control Plant had repeatedly failed. According 
to Mr. Jignesh Desai of the PUC, the four main lift pumps 
are the primary means of transporting sewage from the 
Bayview Hunters Point area into the plant for treatment. 
Mr. Desai advises that if the variable frequency drives are 
not replaced the failure of the drives will damage the 
main lift pumps. The PUC reports that the situation 
posed a potentially significant liability issue for the City if 
the sewer backed up. In accordance with Chapter 6, 
Article IV, Section 6.60 of the San Francisco 
Administrative Code the PUC is required to obtain Board 
of Supervisor approval for all emergency contracts that 
exceed $250,000. 

Mr. Desai reports that the General Manager of the PUC 
transmitted a letter to the President of the PUC 
recommending a declaration of an emergency on April 25, 
2002. The PUC conducted an expedited bid procedure as 
provided for in Section 6.60 of the Administrative Code, 
which does not require the PUC to advertise Invitations 
for Bids in a newspaper as is required under formal 
competitive bidding procedures. On May 1, 2002, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

Invitations for Bids were faxed to five contractors: (a) Bay 
Area Systems and Solutions, Inc., (b) Bleco Builders Inc., 
(c) Mayer Electric Co., Inc., (d) Millard Tong Construction 
Co., and (e) Sierra Electric Company. Attachment I, 
provided by the PUC, contains a summary of the three 
contractor bids received by the PUC. The PUC awarded 
the emergency contract for the amount of $441,000 to 
Sierra Electric Company, the low bidder, on May 7, 2002. 

Comments: 1. Mr. Desai reports that work on the emergency contract 

began on September 10, 2002 and is scheduled to be 
completed by October 31, 2002. Mr. Desai further reports 
that the PUC has paid the contractor $214,830 to date. 

2. Attachment II is a memorandum from Mr. Jon 
Loiacono of the PUC explaining why a declaration of 
emergency was recommended by the PUC General 
Manager on April 25, 2002, but the emergency was not 
ratified by the PUC until August 13, 2002 or 
approximately 3M> months later. This memorandum also 
explains why this project had to be treated as an 
emergency since the work on the contract did not begin 
until September 10, 2002, or approximately 4% months 
after the date of April 25, 2002 when the emergency 
situation was recommended by the General Manager of 
the PUC. 

3. Section 6.60 of the Administrative Code states that: 

An "actual emergency" means a sudden, 
unforeseeable and unexpected occurrence involving 
a clear and imminent danger, demanding 
immediate action to prevent or mitigate loss of or 
damage to, life, health, property or essential public 
services. 

Although the Budget Analyst does not question the 
necessity of this project, the Budget Analyst questions 
why the $441,000 contract for this project had to be 
declared an emergency contract utilizing expedited bid 
procedures under Section 6.60 of the Administrative Code 
since the PUC ratified the declaration of an emergency on 
August 13, 2002 or more than approximately three and 
one half months subsequent to the date of April 25, 2002 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

8 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

when the project was recommended as an emergency by 
the PUC General Manager. If this contract had not been 
treated as an emergency contract, the PUC would have 
been required to utilize formal competitive bidding 
procedures to award the contract, including the 
advertising of the Invitation for Bids in at least one local 
newspaper which handles the City's official advertising. 
Therefore, the Budget Analyst considers approval of the 
resolution to be a policy matter for the Board of 
Supervisors. The PUC responds in Attachment II 
indicating that the delay in declaring the emergency by 
the PUC was due to obtaining needed reviews by the 
Human Rights Commission and City Planning. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Attachment I 



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Attachment II 
^ '^^^ ^ San Francisco Public Utilities Commission &*&&& 




hetch hetchy 

Water & Power 

Clean Water 



MLLIE L BROWN, JR. 
MAYOR 

ANN MOLLER CAEN 

PRESIDENT 

E. DENNIS NORMANDY 

VICE PRESIDENT 

Commissioners 
ASHOK KUMAR BHATT 
JEFFREY CHEN 
ROBERT J. COSTELLO 

PATRICIA E. MARTEL 

GENERAL MANAGER 



1 1 55 MARKET ST., 4TH FlOC 



October 9, 2002 



S.N FRANCISCO, CA94103 • Tel. [415] 55 4-3155 • FAX (415)554-3151 «| 



Harvey M. Rose 

Budget Analyst 

1390 Market Street, Ste 1025 

San Francisco, CA 94103 

Re: Contract No. CW-336E, SEWPCP Bldg 01 1 

Replacement 

Dear Mr. Rose: 



lain Lift Pumps VFDs 



In accordance with Chapter 6, Article IV, Section 6.60 of the San Francisco 
Administrative Code, the San Francisco Public Utilities Commission (SFPUC) 
requested the Board of Supervisors to approve the expenditure of funds for the 
subject contract on September 12, 2002. This letter is in response to additional 
information requested from your office. 

The General Manager of the SFPUC requested an emergency contract on April 
25, 2002. The emergency was ratified on August 13, 2002 by SFPUC Resolution 
No. 02-0151. The reason for the time gap is because this contract required 
review and approval from HRC (Chapter 12D waiver) and City Planning 
(categorical exemption from environmental review) prior to ratification by the 
SFPUC. The General Manager has now directed staff to coordinate these 
reviews in the future with other City departments in an expeditious manner to 
avoid delays similar to this contract. 

The scope of work included purchasing and installing four variable frequency 
drives (VFDs) for sewage main lift pumps at the Southeast Water Pollution 
Control Plant (SEWPCP). The construction could not start until September 2002, 
because VFDs fabrication and delivery had a lead-time of twenty (20) weeks. 
VFDs were ordered on the May 7, 2002 by the Contractor upon the receipt of 
Notice to Proceed from SFPUC. VFDs were delivered to the SEWPCP on 
September 5, 2002. The construction commenced on September 10, 2002. 

If you have further questions regarding this project, please contact me at 242- 
2228. 



Sincerely, 




on Loiacono, Manager 
Environmental Engineering, WPC 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



Item 4 -File 02-1647 



Department: 



Item: 



Grant Amount: 
Grant Period: 

Source of Funds: 

Required Match: 
Indirect Costs: 
Project: 
Description: 



Department of Public Works (DPW) 

San Francisco Redevelopment Agency (SFRA) 

Resolution authorizing the Director of the Department of 
Public Works to accept and expend $9,375,000 in Federal 
Transportation Equity Act for the 21 st Century (TEA21) 
Demonstration Funds with required local matching funds 
of $2,344,000 to undertake environmental studies related 
to the feasibility of building the South Basin Bridge in the 
City and County of San Francisco. 



$ 9,375,000 

October 1, 2001 to September 30, 2011 
Comment No. 5) 



(10 years, See 



U.S. Department of Transportation, Federal Highway 
Administration (FHWA) 

20%, ($2,343,750, See Comment No. 3 and Comment No. 6) 

Indirect costs are not allowed by the granting agency. 

South Basin Bridge Project 

The proposed resolution would authorize the Director of 
the Department of Public Works (DPW) to accept and 
expend $9,375,000 of FHWA Demonstration Funds for the 
undertaking of environmental studies related to the 
feasibility of building the South Basin Bridge. As shown 
in the map in Attachment I provided by Ms. Tina Olson of 
the Department of Public Works, the South Basin Bridge 
is proposed to be located between Candlestick Point and 
Hunters Point, with an exact location to be determined 
after the environmental studies are completed. The San 
Francisco Redevelopment Agency (SFRA) would provide 
the required 20 percent local matching funds in the 
amount of $2,343,750 over the four-year life of the 
environmental studies, for a total project budget of 
$11,718,750. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

12 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

The environmental studies related to the feasibility of 
building the South Basin Bridge would be conducted 
using the subject grant funds, of $9,375,000, together 
with the local match of $2,343,750, for a total project cost 
of $11,718,750. The project would include a formal 
environmental review process required by State and 
Federal law that would produce an Environmental Impact 
Report (EIR) and an Environmental Impact Statement 
(EIS). Such environmental studies would also include a 
water habitat study, a hazardous-materials study, a 
location hydraulic study, a water quality study and a 
traffic study. Ms. Olson indicates that the environmental 
studies are expected to be completed by Fiscal Year 2005- 
2006. According to Ms. Olson, these environmental 
studies would be the initial phase of a larger project to 
design and construct the South Basin Bridge, which has 
an estimated total project cost ranging between $110 
million to $150 million, according to the DPW. 

Ms. Olson advises that the South Basin Bridge would 
provide a more direct route to access Hunters Point 
Shipyard from Highway 101, in order to induce 
commercial development as well as support revitalization 
of the Shipyard. The South Basin Bridge would also 
redirect truck traffic away from local residential streets, 
according to Ms. Olson. The Bridge is intended to also 
accommodate the future extension of the Municipal 
Railway's 3 rd Street Light Rail Project to the Shipyard. 
As noted above, the entire South Basin Bridge Project, 
including the costs for the proposed environmental 
studies, has a total estimated budget ranging between 
$110 million to $150 million. Ms. Olson advises that 
funding sources to construct the Bridge have not been 
identified as of the writing of this report. 

Budget: Attachment II, provided by the DPW, contains the budget 

for the South Basin Bridge Project environmental studies 
totaling $11,718,750, including $9,375,000 in subject 
Federal grant funds and $2,343,750 in SFRA matching 
funds. 

Comments: 1. As shown in Attachment II, provided by Ms. Olson, 

DPW intends to spend an estimated $9,372,364, out of the 
total project budget of $11,718,750, on environmental 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

13 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



consultant contracts to conduct the necessary 
environmental studies. Ms. Olson advises that DPW 
plans to issue a RFP/RFQ in December of 2002, select a 
consultant during the Summer of 2003 and award a 
contract to a consultant by October of 2003, or in 
approximately one year from now. According to Ms. Olson, 
the selected consultant may sub-contract some of the 
specific studies to other firms. As noted above, the 
environmental studies are anticipated to be completed in 
FY 2005-2006. 

The Budget Analyst notes that since the RFP/RFQ has 
not yet been issued, the DPW cannot identify the prime 
and sub- consultants that will be selected, the hourly 
rates or the total cost of the consultant contracts. 
Therefore, the Budget Analyst recommends that 
$9,372,364 for the outside consultant contracts be placed 
on reserve by the Finance Committee pending 
identification of the actual consultants and submission to 
the Finance Committee of total costs including estimated 
hours and hourly rates. Ms. Olson disagrees with this 
recommendation because she states that the City's 
process for reviewing and approving consultant contracts 
already provides for extensive oversight including: (1) 
HRC review and approval the RFP; (2) Civil Service 
Commission review and approval of the proposed use of 
consultants; (3) the entire consultant selection process is 
overseen by HRC; and (4) the final contract is reviewed 
and approved by the Department Head, the Purchaser, 
the City Administrator and the City Attorney. Further, 
Ms. Olson states that for Federally funded transportation 
projects such as this project, Caltrans also performs a pre- 
award audit of the consultants' rates and internal controls 
and must approve the consultant contracts. According to 
Ms. Olson, because of the extensive City and Caltrans 
review and approval process for these consultant 
contracts, DPW estimates that it will take one year to 
have a consultant team on board for this project. Thus, 
Ms. Olson advises that it seems unnecessary to have the 
Board of Supervisors also review the consultant contracts. 

2. As detailed in Attachment II, DPW will expend an 
estimated $2,346,386 to fund in-house DPW staff to 
initially develop the RFP/RFQ and then to oversee and 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

14 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



support the consultant's activities in relation to the 
environmental studies. 

3. The proposed grant requires a 20 percent match, or 
$2,343,750, of the total project costs of $11,718,750. 
According to Ms. Olson, the SFRA included $180,000 of 
such local matching funds for the South Basin Bridge 
Project in the SFRA's FY 2002-2003 budget, as previously 
approved by the Board of Supervisors. This leaves a 
remaining local match balance of $2,163,750 ($2,343,750 
total match required less $180,000 budgeted in FY 2002- 
2003). According to Mr. Don Capobres of the SFRA, and 
as shown in Attachment II, the SFRA intends to provide 
matching funds averaging $721,250 per year for three 
additional fiscal years (Fiscal Years 2003-2004 through 
2005-2006), or a total of $2,163,750 from (a) proceeds from 
the sale of land at the Hunters Point Shipyard, (b) grants 
funds and (c) developer contributions. However, as of the 
writing of this report, Mr. Capobres cannot identify the 
specific funding sources for the remaining local match 
requirement of $2,163,750. 

4. Ms. Olson reports that the Board of Commissioners of 
the San Francisco County Transportation Authority 
placed the South Basin Bridge Project on its Project 
Priorities List and approved the South Basin Bridge 
Project for incorporation into the 2001 Regional 
Transportation Plan of the Metropolitan Transportation 
Commission for the nine-county San Francisco Bay Area. 

5. Attachment III, provided by the DPW, is the 
Department's Grant Information Form, including the 
Disability Access Checklist. Attachment III indicates a 
start date of October 1, 2001. However, Ms. Olson advises 
that the California Department of Transportation 
(Caltrans), the grant pass-through agency, only approved 
the subject grant amount on September 11, 2002 and 
DPW has until September 30, 2011 to expend the subject 
grant funds, or a period of over nine years. Ms. Olson also 
advises that none of the subject grant funds have been 
accepted or expended to date. 

6. Ms. Olson advises that the proposed resolution 
incorrectly states that the required local matching funds 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

are $2,344,000. As shown in Attachment II, the required 
local matching funds are $2,343,750. Therefore, the 
proposed resolution should be amended to reflect the 
correct amount of matching funds. 

7. Given (1) that the subject Federal grant of $9,375,000 
requires a 20 percent local match of $2,343,750, with no 
identification of specific funding sources except for 
$180,000 and (2) that the entire South Basin Bridge 
Project has a total estimated project cost ranging between 
$110 million to $150 million, for which funding sources 
have not yet been identified, the Budget Analyst considers 
approval of the proposed resolution to be a policy matter 
for the Board of Supervisors. 

Recommendations: 1. In accordance with Comment No. 1, amend the 
proposed resolution by reserving $9,372,364 for the 
environmental consultant contracts pending identification 
of the outside consultants and submission to the Finance 
Committee of total costs, including estimated hours and 
hourly rates. As noted previously, Ms. Olson disagrees 
with this recommendation because she states that the 
City's process for reviewing and approving consultant 
contracts already provides for extensive oversight 
including: (1) HRC review and approval the RFP; (2) Civil 
Service Commission review and approval of the proposed 
use of consultants; (3) the entire consultant selection 
process is overseen by HRC; and (4) the final contract is 
reviewed and approved by the Department Head, the 
Purchaser, the City Administrator and the City Attorney. 
Further, Ms. Olson states that for Federally funded 
transportation projects such as this project, Caltrans also 
performs a pre-award audit of the consultants' rates and 
internal controls and must approve the consultant 
contracts. According to Ms. Olson, because of the 
extensive City and Caltrans review and approval process 
for these consultant contracts, DP W estimates that it will 
take one year to have a consultant team on board for this 
project. Thus, Ms. Olson advises that it seems 
unnecessary to have the Board of Supervisors also review 
the consultant contracts. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

16 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



2. In accordance with Comment No. 6, amend the 
proposed resolution by substituting $2,343,750 for 
$2,344,000 on page 1, line 6 and line 24. 

3. In accordance with Comment No. 7, approval of the 
proposed resolution, as amended, is a policy matter for 
the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

17 



Attachment I 



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18 



Attachment II 
Page 1 of 2 



South Basin Bridge Project 








Total Federal Grant 


$9,375,000 






Local Match @ 20% 


2,343,750 






Total 


11,718,750 






Cash Flow Analysis: 








EIR/Planninq/PE/Desian 


Total 


Fed 


Local 


2002-03 


$900,000 


$720,000 


$180,000 


2003-04 


3,606,250 


2,885,000 


721,250 


2004-05 


3,606,250 


2,885,000 


721,250 


2005-06 


3,606,250 


2,885,000 


721,250 




$11,718,750 


$9,375,000 


$2,343,750 



19 



Attachment II 
Page 2 of 2 



South Basin Bridge Project-Environmental Phase 
Engineer's Estimate of Costs for Environmental Analysis 



Total Federal Grant 9,375,000 

Local Match @ 20% 2,343,750 

Total $11,718,750 



Environmental Consultant Contracts $9,372,364 

Environmental Review (EIR/EIS/CEQA/NEPA) 

Cultral Resources Study(Historic Preservation) 

Water Habitat Study 

Hazardous Materials Study and Investigations 

Location Hydraulic Study 

Natural Environment Study (Water Quality) 

Traffic Study 

DPW Staff Costs $2,346,386 



DPW Staff Costs 










Project Management 


Classification 


Hourly Rate 


Hours 


Extension 


Project Manager III 


5506 


$155 


10,376 


$1,603,481 


Manager Regulatory Affairs 


9398 


122 


2,283 


277,795 


Senior Clerk Typist 


1426 


59 


156 


9,263 


Engineering 








- 


Civil Engineer 


5241 


121 


1,556 


188,828 


Assistant Civil Engineer 


5203 


88 


726 


64,155 


Civil Engineer Associate I 


5364 


74 


311 


22,934 


Site Assessment Remediation (Chemist) 


2488 


107 


726 


77,604 


Surveys 








50,000 


Student Intern 


5382 


54 


792 


43,063 


Senior Clerk Typist 


1426 


59 


156 


9,263 


Total DPW Staff Costs 








$ 2,346,386 



NOTES: 

1. Preliminary Total Project Cost is between $110 to $150 million for this project. 

2. Hourly Rates are based on the current FY02-03 rate and does not account for inflation 



20 



Attachment III 

Page 1 of 2 
: ilc Number: 

(Provided by Clerk of Board of Supervisors) 

Grant Information Form 

(Effective January 2000) 

3 urpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
ixpend grant funds. 

'he following describes the grant referred to in the accompanying resolution: 

. Grant Title: Transportation Equity Act for the 21 st Century Demonstration Funds (Demo Funds) 

!. Department: Public Works 

i. Contact Person: Tina Olson Telephone: 554-4830 

k Grant Approval Status (check one): 

X Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $ 9,400,000 

5a. Matching Funds Required: $ 2,350,000 
b. Source(s) of matching funds (if applicable): SFRA funds 

7 a. Grant Source Agency: U.S. Department of Transportation, Federal Highway Administration (FHWA) 
b. Grant Pass-Through Agency (if applicable): California Department of Transportation (Caltrans) 

3. Proposed Grant Project Summary: 

South Basin Project 

Project Limits: 



3. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: October 1 , 2001 End-Date: September 30, 201 1 

10. Number of new positions created and funded: -0- 

11. If new positions are created, explain the disposition of employees once the grant ends? 

12a. Amount budgeted for contractual services: $9,375,000 

b. Will contractual services be put out to bid? Yes 

c. If so, will contract services help to further the goals of the department's MBEAA/BE 

requirements? Yes 



21 



Attachment III 
Page 2 of 2 

d. Is this likely to be a one-time or ongoing request for contracting out? One-time 



13a. Does the budget include indirect costs? 

b1. If yes, how much? $ 

b2. How was the amount calculated? 



Yes 



[X] No 



c. If no, why are indirect costs not included? 

[X] Not allowed by granting agency [ ] To maximize use of grant funds on direct services 

[ ] Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 



[X] Existing Site(s) 
[ ] Rehabilitated Site(s) 
[ ] New Site(s) 



[ ] Existing Structure(s) 

[ ] Rehabilitated Structure(s) 

[ ] New Structure(s) 



] Existing Program(s) or Service(s) 
] New Program(s) or Service(s) 



16. The Departmental ADA Coordinator and/or the Mayors Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: Included in the scope of work will be the installation of new curb ramps in accordance with the 
Federal Americans with Disability Act (ADA). 



Departmental or Mayor's Office of Disability Reviewer: 

Date Reviewed: 



Department Approval: 




Edwin M. Lee 



Kevin Jensen 



Director of Public Works 



(Signature) 



22 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

Item 6 - File 02-1236 



Department: 
Item: 

Description: 



Department of Building Inspection (DBI) 

Ordinance amending Section 110 of the San Francisco 
Building Code to increase fees for Department of Building 
Inspection services. 

The proposed ordinance would amend the Public Works 
Code to create two new fees and increase existing fees for 
Building Code-related services performed by the 
Department of Building Inspection (DBI). According to 
Ms. Amy Lee, Assistant Director of DBI, the Department 
is proposing the fee changes because the current fee levels 
do not cover the costs of providing certain Building Code- 
related services. Therefore, the proposed ordinance would 
increase certain fees and create two new fees in order to 
cover the costs to provide such services. In the attached 
memorandums, DBI states that DBFs fees have not been 
increased since 1991 or 1992 1 . 



The proposed fee changes are: 

• a new Central Permit Bureau Fee of $20.00; 

• a new Retrieval of Records from Off-Site Warehouse 
Fee of $20.00; 

• an increase in the fee for a Report of Residential 
Records (3R) from $27.30 to $50.00; and 

• standardizing the hourly inspection fee to $80.00 per 
hour from the current range of fees from $44.90 to 
$86.35. 

Attachment I, provided by Mr. Frank Chiu, the Director 
of DBI, contains a table showing the existing fees, the 
proposed fees, the current annual revenues realized from 
the existing fees, and the proposed annual increase in fee 
revenues if the new fees are adopted. Attachment I also 
explains the nature of these fees, the basis for 
establishing the new fees and increasing the existing fees, 
the current annual costs to perform the services and the 
projected percentage of costs to be recovered if the 
proposed fees are approved by the Board of Supervisors. 



1 The DBI memorandum (Attachment I) states that DBI fees were last changed in 1992. The other 
DBI memorandum (Attachment II) states that DBI fees were last changed in 1991. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

23 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



Comments: 



1. DBI reports in Attachment I that for FY 2001-2002, 
actual revenue realized from the existing Report of 
Residential Records (3R) and hourly inspection fees was 
$644,834. As shown in Attachment I, DBI estimates that 
the proposed fee changes would result in estimated 
annual fee revenues of $2,056,539, resulting in an annual 
increase in fee revenues of $1,411,705, for the four subject 
fees or an increase of 218.93 percent over the current fee 
revenues. 



2. DBI reports in Attachment I that the Central Permit 
Bureau incurs estimated annual costs of $1,100,000 and 
that the new Central Permit Bureau Fee would result in 
estimated annual revenues of $1,140,000, resulting in a 
cost recovery of 103.64 percent. DBI reports that the 
production of the Report of Residential Records incurs 
annual costs of an estimated $1,042,435 and that the new 
Report of Residential Records Fee amount would result in 
estimated revenues of $410,746 or cost recovery of 39.40 
percent. DBI further reports that the annual costs for 
Records Storage and Retrieval are an estimated $6,100 
and that the new fee for Records Storage and Retrieval for 
Refunds 2 would result in estimated annual revenues of 
$480 or cost recovery of 7.87 percent. DBI did not provide 
cost recovery calculations for the proposed increased 
hourly inspection fees. 

3. Attachment II, provided by Mr. Chiu, contains DBFs 
Revenue Fund balances for Fiscal Years 1998-1999 
through 2002-2003. As shown in Attachment II, Mr. Chiu 
reports that the Building Inspection Revenue Fund is 
currently projected to have a $5,400 ; 000 surplus revenue 
balance at the end of FY 2002-2003 and he explains why 
DBI is now requesting changes in the fee schedule despite 
this current projected surplus. The Budget Analyst 
questions the need to increase fee levels when DBI 
currently anticipates a surplus revenue balance of 
$5,400,000 at the end of FY 2002-2003. 



Recommendation: 



Approval of the proposed ordinance is a policy matter for 
the Board of Supervisors. 



2 This fee included in the table in Attachment I is referred to as the Records Storage and Retrieval 
for Refunds. However, the correct fee name as included in the ordinance is Retrieval of Records from 
Off-Site Warehouse Fee. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

24 



City and County of San Franciscc i 
Department of Building inspection 



Board of Supervisors 
Finance Committee 
1 Dr. Carlton B. Goodlett P 
San Francisco CA 94102 

Honorable Members of the 



ace, Room 244 



Finance Committee; 



As you are aware the Department 
charged to safeguard the lie 
City's Building, Housing, Phmb 
Regulations. In order to fulfil 
buildings and structures for 
conformance with related cDdes 
and updates microfilm reco'ds 
forum through advisory committees 



The Department's services 
housing fees, microfilm, anil 
cannot receive any Genera 
Department to provide adequate 
event of an earthquake or 
tables and are part of the Bb 
project or renovation. The 



However, since 1992, the C 
such as the One-Stop Prog 'a 
turnaround time, online perfnitting 
Outreach Program, Brown 



After many public meeting; 
areas in our fee structure 




Paee 1 of" 7 
Willie Lewis _£ovvn iW., Mayor 

Frank Y. Chiu, C.B.O., Director 



October 10, 2002 



Proposed Fee Changes for the Building Code 



of Building Inspection is a Special Fund 1 Department that is 
and property of the citizens of San Francisco by enforcing the 

ing, Electrical, and Mechanical Codes and its Disability Access 
this mission DBI engages in the following activities: 1) inspects 
compliance with related codes and regulations; 2) reviews plans for 
and regulations; 3) approves and issues permits; 4) maintains 
; and 5) processes Residential Records reports; and 6) provides a 
for citizens to make recommendations and resolve issues. 



are funded solely from fee revenues for plan checking, inspections, 
code enforcement. As a Special Revenue Funded Department, it 

Funds to maintain its operations. As a result, it is incumbent on the 
financial measures to ensure the continued operations in the 

ny downturn in the economy. All fees are listed in a schedule of fee 
ilding Code. The fee tables are primarily based on the value of the 

schedule of Fee Tables has not changed since 1992. 



epartment has implemented numerous additional customer services 
m, substantial increase in staff to improve quality and reduce the 
, Community Action for Seismic Safety, Code Enforcement 
3ag Lecture Lunches, etc. 



and input, and careful review, we believe that there are certain 
has been under-funded: 



that 



New Centra Permit Bureau Fee of $20.00 for permit processing of each fee 
processed. The Central Permit Bureau is under the management of the Building 
Inspection Commission under SF Charter Section D3.750-4. CPB must recover 
the costs incjrred in permit processing and issuance. This fee is necessary for 
proper management of CPB In past years, there has been no funding 



Special Fund Departments rely 
no legislative or administrative 
Departments must provide their 



solely on their own various sources of revenue to operate the Department. There is 
mfcnanism to receive funds from the General Fund If ever necessary. Special Fund 
own revenue mechanisms to cover all operating and administrative expenditures. 



1660 Mission Street, Sixth Floor - San Francisco, CA 94103 

Office (415) 55B-6131 - FAX (415) 558-6225 

www.ci.sf.ca.us/dbi - frank_chiu@cl.sf.ca. us 

2S 



mechanism 
revenues the 
shortfall. Ne* 
57.000 perm 
$975,000 of 
salary 

[($975k + $1 
BICsu 



Attachment I 
Page 2 of 7 



established for the collection of such direct costs. DBI surplus 
are no longer available have covered the resulting budgetary 
fee would provide an additional $1.14 million based on a projected 
ts in new revenue. Central Permit Bureau incurs approximately 
direct salary expenses and an additional $153,000 in direct non- 
On average, CPB processes about 59,838 permits yearly. 
53k)/59,838] Please note, the original new fee was $18.85 but 
bseq jently rounded this figure to $20. 



experses 



b. Increase Report of Residential (3-R Report) Fee from $27.30 to $50. 0Q. 3-R 

reports take 3 significant amount of clerical time to research, prepare reports, 
mail, and file and copy each report. San Francisco charges significantly less 
than other jurisdictions for 3-R reports. 2 Increase in 3-R fee would result in an 
additional $201,417 in revenue. The Records Management Section incurs 
approximate y $1.3 of direct expenses and receives approximately $370,000 in 
revenue for (he entire section. It takes approximately 1 hour and 30 minutes of 
clerk time wi;h an hourly rate of $32.33 including fringes. The analysis centered 
only on ensuring the fee reflected salary expenses since community input 
dictated that a fee of more than $50 would be unacceptable. 

For permits jhat have expired more than one year before the date of request of 
any refund, ;in additional charge of $20 shall be added for records storage 
and retrlev* I. There is substantial direct cost (approximately $20) to retrieve 
older record^ from off-site warehousing. 

Standardize hourly fees throughout the Fee Table for plan review, 
Inspection, and special services at $80. Current hourly fees range is $36.35 
(Table 1-B, i:em #7), $72.45 (Table 1-B, Item #1), $68.5 (Table 1-G, Item #1). 
$55.90 (Tab e 1-K, item #3), $44.90 (Table 1-K, Item #4). Proposed standard 
hourly fee is $72.45 plus a cost of living adjustment of 3.5 % resulting inn $74.99. 
The origina amount was determined to be $74.99 but BIC subsequently 
rounded this figure to $80. 



The Department is aware 
Department will propose fo 
analyze our fee structure 
and review Marshall and 
Commission and its public 
provision of our services. 



that 



cc: Harvey Rose, Budget Analyst 



Daly City charges $45, OaWanc 



a serious and thorough analysis of all its fees is necessary. The 
■ next fiscal year, to obtain highly specialized fee consultants to 
conduct time and motion studies, conduct benchmarking analysis, 
Swift valuations to provide recommendations to the Department, its 
jsers to ensure that the current fee structure adequately reflect the 



Very truly yours, 




Frank Y. ChiuTC.B.O. 
Director 



charges $110 Base Fee, and Los Angeles charges ?70.25 

2 

26 



Attachment I 
i-age j ot 7 



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CO K 




DEPARTMENT OF BUILDING INSPECTION 



Clty& 
1660 



M 



DATE: October 10, 

TO: Ms. Amy L^e 

FROM: 



Attachment I 
Page 4 of 7 



County of San Francisco 
ssion Street, San Francisco, California 94103-2414 



MEMORANDUM 



[2002 

, Assistant Director 



Alan Tokugiwa, Code Analy* 

Lou Aurea, ! Senior Administrative Analyst 



SUBJECT: Proposed Fe; Changes to Section 110 of Building Code 



TABLE 1-B PERMIT APPLICATION AND PLAN REVIEW FEES 



ITEM NUMBER 



DESCRIPTION 



CURRENT FEE 



PROPOSED FEE 



BACK CHECK FEE 



$ 72.45 



S 80.00 



ELECTRICAL PLAN 
REVIEW 



S 72.45 



S 80.00 



MECHANICAL PLAN 
REVIEW 



S 72.45 



$ 80.00 



PL AN REVIEW 
UNDER PRIOR CODE 



$86.35 



80.00 



PFE-APPLICATION 
PLAN REVIEW 

DIPT. EMPLOYEE 
FEE 

AJTERFIRST2 
HOURS 



! 137.05 
$ 72.45 



S 160.00 
$80.00 



13 



PLIUMBING PLAN 
REVIEW 



NO CHARGE 



$ 80.00 PER HR. 



28 



TABLE 1-C — PLUMBIN 


G PERMIT FEES 




Attachment I 
Page 5 ot / 


ITEM NUMBER 




DESCRIPTION 


CURRENT FEE 


PROPOSED FEE 


V. B 


ST 


D. INSPECTION 
FEES 


$ 68.50 


$80.00 


TABLE 1-E — ELECTRK 


^AL PERMIT FEES 


ITEM NUMBER 




DESCRIPTION 


CURRENT FEE 


PROPOSED FEE 


B 


S 


FT). INSPECTION 
FEES 


S 63.50 


S 60.00 


VI 


s 


JRVEY: BASE 
MINIMUM 


S 137.00 


S 160.00 


VI 


LI 


FE SAFETY; BASE 
MINIMUM 


S 137.00 


S 160.00 


VI 


A 


DDL HOUR FEE 


S 68.50 


$ 80.00 


TABLE 1-G — INSPE 


CT 


ONS, SURVEYS S 


t REPORTS 





ITEM NUMBER 



DESCRIPTION 



CURRENT FEE 



PROPOSED FEE 



STD. HOURLY 
INSPECTION 



S 68.50 



S 80.00 



RFT 



OF RESIDENTIAL 
RECORDS (3R) 



S 27.30 



$50.00 



TABLE 1-J — MISCELLA NEOUS FEES 



ITEM NUMBER 



DESCRIPTION 



CURRENT FEE 



PROPOSED FEE 



CENTRAL PERMIT 
BUREAU FEE 
PERMIT 
PROCESSING 



NO CHARGE 



29 



S 20.00 
PER PERMIT 



TABLE 1-L — PUBLIC INFORMATION 



Attachment I 
Page b of 7 



fTEM NUMBER 



DESCRIPTION 



CURRENT FEE 



PROPOSED FEE 



RETRIEVAL OF 
RECORDS FROM 

•SITE 
WAREHOUSE 



NO CHARGE 



S 20.00 
PER REQUEST 



TABLE 1-P — APARTME NT HOUSE & HOTEL LICENSE FEES 



ITEM NUMBER 



DESCRIPTION 



CURRENT FEE 



PROPOSED FEE 



CHANGE OF 

OWNERSHIP 

MORE APARTMNTS 
THAN 30 UNITS 



$34.15 

$ 50.00 FOR EACH 
ADD'L 10 UNITS 



534.15 

5 50.00 FOR EACH 
ADD'L 10 UNITS 



CHANGE OF 

OWNERSHIP 

RE HOTELS 
ThKn 175 ROOMS 



$34.15 

$ 50.00 FOR EACH 
ADD'L 25 ROOMS 



$34.15 

$ 50.00 FOR EACH 
ADD'L 25 ROOMS 



Note* These fees ara approved 



by prior ordinance, but Inadvertently deleted. Need to be re-approved. 



TABLE 1-Q — HOTEL CONVERSION ORDINANCE FEES 



ITEM NUMBER 



DESCRIPTION 



CURRENT FEE 



PROPOSED FEE 



REQUEST FOR 
HEARING INSPCTN 
ST/VFF REVIEW FEE 



$68.50 



■ 80.00 



UNSUCCESSFUL 

CHALLENGE:.USAGE 

REPORT 

ST/FF REVIEW FEE 

REQUEST FOR 

WINTER RENTAL... 

ST/ FF REVIEW FEE 



$68.50 



S 80.00 



$ 68.50 



$ 80.00 



30 



TABLE 1-R— REFUNDS 



Attachment I 
Page 7 of 7 



ITEM NUMBER 



DESCRIPTION 



CURRENT FEE 



PROPOSED FEE 



F'ERMITOR 
IMSPECTiON FEES 

-UUILDING PERMIT 
- DEMOLITION 
PERMIT 
-GRADING PERMIT 



S 88.70 
S 68.50 

S 68.50 



$ 80.00 
5 80.00 

$80.00 



COMBINATION 
PERMIT &INSP. FEES 
-I ELECTRICAL 
- PLUMBING 
-MECHANICAL 



S 68.50 
S 68.50 
$ 68.50 



S 80.00 
$ 80.00 
S 80.00 



TABLE 1-S — UNREINFDRCED MASONRY BEARING WALL BUILDING RETROFIT 



ITEM NUMBER 



DESCRIPTION 



CURRENT FEE 



PROPOSED FEE 



RliVIEW INVENTORY 
FOR SEC. 1604B.2. 



$ 75.00 



$ 80.00 



RliVIEW SUMMARY 
Ol : ENGINEERING 
RliPORT 
SEiCTION 1604B.2.3 



$150.00 



$160.00 



31 



City and County of San Francisco 
department of building inspection 



Harvey Rose 

Budget Analyst 

1390 Market Street, Suite 1025 

San Francisco CA 94102 

Dear Mr. Rose: 

As a result of several factois 
interest earnings, high cod<! 
revenue estimates & budge ted 
following balance to our su 



1998-99 
1 999-00 
2000-O1 
2001-02 
2002-03 



$1.8 Million 
$8.2 Million 
$2.3 Million 
$(1.7) Millior 
$5.4 Million 



Because we are a Special 
surplus balance to provide 




Attachment II 
Page 1 of 2 
Willie Lewis Brown Jr., Mayor 
Frank Y. Chiu, C.B.O., Director 



October 10, 2002 



Surplus Funds 



, unusually high construction activity, dot-com real estate boom, 
violation settlement funds, and conservative spending, conservative 
expenditures, the Department of Building Inspection has had the 
plus account: 



: und Department, it is necessary that DBI maintain a sufficient 
Dngoing funds for operations. This is especially critical in cases of 
emergency, economic dow iturn and earthquakes. DBI provides many services that do not 
necessarily generate reven je such as complaint response, technical guidance, and many other 
customer services separate from permit issuance. 



Indeed, many jurisdictions 
ensure sufficient operating 
expenses alone. To date c 
significant reduction in rev< 
fiscal year 2001-02. This 
spent its budgeted ex 



maintain surplus of at least a half year's of operating expenses to 
unds. The Department incurs nearly $23 million in just salary 
balance in surplus is approximately $5.4 million. Because of 
e, DBI utilized nearly $3.5 million of surplus funds to close out 
vyjas necessary despite efforts to minimize expenditures (DBI under 
pendijures by nearly $6.0 million). 



The Department has not i 
services two-fold. It has ah 
and respond to increasing 



It is also likely that the unu< 
a surplus will not be repeat 
new construction will not si^n 
level we saw in previous fis 



n< -Teased its fee since 1991. However, we have expanded our 
■•* o become necessary to examine expenditures to improve services 
alary expenses. 



jally high level of construction activity that allowed us to accumulate 
d. Indeed, Ken Rosen, a highly regarded economist believes that 
ificantly occur until 2007. Further such activity will not reach the 
:al years. 



1 660 h Isalon Street, Sixth Floor - San Francisco, CA 941 03 
Office (415) 558-6131 - FAX (415) 658-6225 
www.ci.cf.ca. us/dbl • frank_chlu@cl.sf.ca.ua 
32 



Harvey Rose 
October 10, 2002 
Page 2 



It has become increasingly 
we can no longer delay 
imprudent to deplete our 



:lear that the current fees do not adequately capture our costs and 
changes to the fees. As a non-General Fund Department, it would ba 
surplus funds. 



Very truly y 



Attachment II 
Page 2 of 2 




Fran 
Director 



33 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



Item 7 - File 02-1580 

Department: 

Item: 



Amount: 
Gift Period: 
Source of Funds: 

Required Match: 
Indirect Costs: 

Description: 



Public Library 

Resolution authorizing the San Francisco Public Library 
to accept and expend a gift in the amount of $44,342 from 
the Friends and Foundation of the San Francisco Public 
Library to support public programming and outreach at 
Branch Libraries and to continue production of a monthly 
newsletter to promote programs, services and special 
events offered by the Public Library. 

$44,342 

December 1, 2002 to June 30, 2003 (seven months) 

Friends and Foundation of the San Francisco Public 
Library 

None 

The proposed resolution does not include indirect costs in 
order to maximize the use of available funds on project 
expenditures. 

The proposed resolution authorizes the Public Library to 
accept and expend a gift of cash in the amount of $44,342 
from the Friends and Foundation of the Public Library in 
order to create two limited-term, half-time positions. The 
two positions would be a Curator II and a Public 
Information Officer (PIO). The Curator II position would 
conduct community outreach activities related to 
programs, services and special activities for children, 
youth and adults offered by the Branch Libraries. These 
activities would increase community awareness and 
participation in programs offered by the Library through 
June 30, 2003 (See Comment No. 3). 

Mr. George Nichols of the Public Library advises that the 
Curator II position most closely matches the duties and 
responsibilities required for community outreach 
activities, as determined by the Public Library's Human 
Resources department. For that reason, according to Mr. 
Nichols, the position created under the subject gift would 
be a Curator II. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

The PIO position would be hired to write, edit and 
manage the production of "At the Public Library," a 
monthly publication that promotes and informs the 
community on services, programs and special events 
sponsored by the Library. "At the Public Library" also 
provides information on Library locations, hours and 
general items of interest. The Friends and Foundation of 
the San Francisco Public Library currently produces "At 
the Public Library." However, according to Mr. Nichols, 
the Friends and Foundation will no longer produce "At 
the Public Library" and has only agreed to fund the 
proposed PIO position through June 30, 2003 (See 
Comment No. 3) 

Budget: The subject gift budget submitted by the Public Library is 

Attachment I and shows total costs of $40,742 (See 
Comment No. 2) 

Comments: 1. According to Mr. Nichols, the Curator II and PIO 

would both be new limited term positions created to begin 
on December 1, 2002 and terminate on June 30, 2003, a 
period of seven months. However, the proposed resolution 
does not designate these two positions as either L (limited 
term) or G (grant or gift funded). Mr. Nichols advises 
that these two positions will conduct activities beyond the 
routine workload of the Library staff, during this seven- 
month period. 

2. Mr. Nichols advises that the requested gift amount of 
$44,342 was incorrectly calculated and the correct total 
budget for the two positions and fringes from December 1, 
2002 through June 30, 2003 is $40,742, including $20,389 
for the Curator II and $20,353 for the Public Information 
Officer. The Budget Analyst therefore recommends the 
resolution be amended to reduce the subject gift amount 
by $3,600 from $44,342 to $40,742. 

3. Mr. Nichols advises that the subject gift from the 
Friends and Foundation is only intended to fund these 
two positions for the remainder of the current fiscal year. 
According to Mr. Nichols, Public Library staff would later 
determine whether to seek City funding as part of the FY 
2003-2004 annual budget process for the continuation of 
these two positions. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

35 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



The Budget Analyst questions the policy of creating two 
new positions at this time to perform ongoing activities, 
which would only be funded by this subject gift for seven 
months. The Budget Analyst also notes that it is likely 
that the Public Library will request that these two 
positions continue to be funded in their FY 2003-2004 
budget with Public Library funds. Therefore, the Budget 
Analyst considers approval of the subject gift to be a 
policy matter for the Board of Supervisors. 

4. Attachment II, provided by the Library, is the Grant 
Information Form, which includes the Disability Access 
Checklist. 

Recommendations: 1. In accordance with Comment No. 1 amend the proposed 

resolution to request the Controller to designate that the 
two new positions created under the subject gift be "G" 
coded for gift or grant-funded positions 

2. In accordance with Comment No. 2, 

(a) amend line 21 on page 1 of the proposed resolution, 
File 02-1580, to substitute $20,389 for $22,189. 

(b) amend line 2 on page 2 of File 02-1580 to substitute 
$20,353 for $22,153. 

(c) amend line 10 on page 2 of File 02-1580 to substitute 
$40,742 for $44,342. 

3. As discussed in Comment No. 3, approval of the 
proposed resolution, as amended, is a policy matter for 
the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

3$ 



San Francisco Public Library 
FY 2002-03 



?a2;e 1 of 1 



Gift Budget 



TITLE: Gift from the Friends and Foundation of the San Francisco Public Library to support 
outreach activities for the Branch Libraries and to continue publication of "At the Public 
Library" a monthly publication to inform and promote Library programs, services, and 
special activities among San Francisco's diverse communities. 



DIVISION: Public Affairs 

CONTACT PERSON: Marcia Schneider/George Nichols 



A. PERSONAL SERVICES 



Classification Number and Title 


Bi-Weekly 
Salary Range 


No. 
Positions 


FTE 


Bi-Weekly 
Salary (mid) 


Annual 
Salary 


3542 Curator II (effective 12/1/02) 


1835-2230 


S 1 


$ 


S 2,074 


$ 15,725 


1312 PIO (effective 12/1/02) 


1831-2226 


S 1 


$ 


S 2,069 


S 15,694 






































TOTAL SALRIES 




S 1 


S 1 




$ 31,419 


FRINGE BENEFITS 










S 9,323 


TEMPORARY HELF (3610s) 






$ 




$ 


OVERTIME 










S 


TOTAL PERSONAL SERVICES 




S 1 


$ 1 




$ 40,742 


TOTAL OPERATING EXPENSE 










$ 














TOTAL COST 










S 40,742 















Retirement 
OASDI/HI 

Unemployment Insurance 
Subtotal 

Disability Insurance 

Medical 

Dental 

Subtotal 



TOTAL 



Pay 


Period 


Annual 


s 





$ 





s 





$ 





s 





S 





$ 





$ 





$ 


3 


$ 


67 


$ 


225 


$ 


2,700 


$ 


34 


$ 


886 


$ 


262 


$ 


3,653 



3542 Curator 


1312 PIO 


S 1,179 
S 1,203 
$ 157 
S 2,540 

S 38 
S 1,575 
S 511 
$ 2,125 

S 4,664 

S 20,389 


$ 1,177 
$ 1,201 
S 157 
S 2,535 

S 38 
S 1,575 
S 511 
S 2,125 

S 4,659 

S 20,353 



37 



Attachment II 
P-age 1 of 2 

^.nber: 

(Provided by Clerk of Board of Supervisors) 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1) Grant Title: Gift from the Friends and Foundation of the San Francisco Public Library to support 
outreach activities for the Branch Libraries and to continue publication of "At the Library", a 
monthly publication to inform and promote Library programs, services, and special activities 
among San Francisco's diverse communities. 

2) Department: Public Library 

3) Contact Person: George M. Nichols Telephone: 557-4248 

4) Grant Approval Status (check one): 

[ X ] Approved by funding agency [ ] Not yet approved 

5) Amount of Grant Funding Approved or Applied for: $44,342.00 

6) a. Matching Funds Required: $0.00 

b. Source(s) of matching funds (if applicable): N/A 

7) a. Grant Source Agency: Friends and Foundation of the San Francisco Public Library 
b. Grant Pass-Through Agency (if applicable): N/A 

8) Proposed Grant Project Summary: 

• $22,189 to establish a limited-term, half-time Curator II position (effective date 12/1/02) to conduct 
community outreach activities related to programs, services, and special activities for children, youth, and 
adults offered by the Branch Libraries. 

• 522,153 to establish a limited-term, half-time Public Information Officer (effective 12/1/02) to continue 
publication of "At the Library" a monthly publication that promotes and informs the community on services, 
programs, and special events sponsored by the Public Library. 

9) Grant Project Schedule, as allowed in approval documents, or as proposed: 

(1) Start-Date: December 1, 2002 End-Date: June 30, 2003 

10) Number of new positions created and funded: Two half-time positions - a half-time Curator II and a half- 
time Public Information Officer. Both positions are limited-term appointments. 

1 1 ) If new positions are created, explain the disposition of employees once the grant ends? Appointments will 
be made on a limited-term basis. Position authority will expire June 30, 2003 at which time employment 
will be terminated. Continuation of programs or activities funded by this gift beyond June 30, 2003 is 
subject to approval of the Mayor and appropriation of funds by the Board of Supervisors. 

38 



Attachment II 
Page 2 of 2 

12) a. Amount budgeted for contractual services: None. 

b. Will contractual services be put out to bid? N/A 

c. If so, will contract services help to further the goals of the department's MBE/WBE 
requirements? N/A 

d. Is this likely to be a one-time or ongoing request for contracting out? N/A 

13) a. Does the budget include indirect costs? [ ] Yes [X]No 
. b1. If yes, how much? $0.0 

b2. How was the amount calculated? 

c. If no, why are indirect costs not included? 

i) [ ] Not allowed by granting agency [ X ] To maximize use of grant funds on direct 

services 
ii) [ ] Other (please explain): This is a private gift for specific purposes 

14) Any other significant grant requirements or comments: 



15)**Disability Access Checklist*** 

16) This Grant is intended for activities at (check all that apply): 

17) [ ] Existing Site(s) [ ] Existing Structure(s) [ x ] Existing Program(s) or Service(s) 

1 8) [ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

1 9) [ ] New Site(s) [ ] New Structure(s) 

20) The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act 
and all other Federal, State and local access laws and regulations and will allow the full inclusion of 
persons with disabilities, or will require unreasonable hardship exceptions, as described in the comments 
section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer Rich Walsh 

(Name) 

Date Reviewed: 8/20/02 



Department Approval: Susan Hildreth • City Librarian 

(Name)- (Title) 

(Signature) 

39 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

Item 8 - File 02-1339 



Item: 



Description: 



Ordinance amending the San Francisco Business and Tax 
Regulations Code to enact a new Article 20 to provide for 
the protection of private financial information. 

The proposed ordinance, to be known as the "San 
Francisco Financial Information Privacy Ordinance of 
2002," would amend the San Francisco Business and Tax 
Regulations Code to require financial institutions to 
provide specified notice to, and to obtain the consent of 
their consumers before disclosing or sharing confidential 
consumer information with any third party. The proposed 
ordinance provides that a "financial institution" is defined 
as "any institution engaging in financial activities as 
described in Section 1843(k) of Title 12 of the United 
States Code and doing business in the City and County of 
San Francisco. An institution that is significantly engaged 
in financial activities is a financial institution." 



Under the proposed ordinance, which, if approved, would 
become operative on January 1, 2003, a financial 
institution would be prohibited from denying a consumer 
a financial product or a financial service because the 
consumer has not provided consent to the financial 
institution to disclose or share the consumer's confidential 
information. In addition, the proposed ordinance would 
require that financial institutions which receive 
confidential consumer information from a third party take 
reasonable steps to ensure that the third party providing 
the information has followed the required notice and 
consent procedures, as contained in this proposed 
ordinance, prior to sharing confidential consumer 
information. 



"Confidential consumer information" is defined as 
personally identifiable financial information (1) provided 
by a consumer to a financial institution, (2) resulting from 
any transaction with the consumer or any service 
performed for the consumer, or (3) otherwise obtained by 
the financial institution including any list, description, or 
other grouping of consumers, and publicly available 
information pertaining to them that is derived using any 
nonpublic personal information, but does not include any 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

40 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



list, description, or other grouping of consumers, and 
publicly available information pertaining to them that is 
derived without using any confidential consumer 
information. According to the proposed ordinance, 
"Personally identifiable financial information means 
information (1) that a consumer provides to a financial 
institution to obtain a product or service from the 
financial institution, (2) about a consumer resulting from 
any transaction involving a product or service between 
the financial institution and a consumer, or (3) that the 
financial institution otherwise obtains about a consumer 
in connection with providing a product or service to that 
consumer." 

The proposed ordinance provides that certain consumer 
information can be released by a financial institution, 
including: (a) information that is not personally 
identifiable to a specific consumer; (b) information that is 
necessary to effect, administer, or enforce a transaction 
requested or authorized by the consumer; (c) information 
that is necessary to protect the confidentiality or security 
of the financial institution's records, to protect against 
fraud or for resolving consumer disputes or inquiries; (d) 
information to be released to persons holding a legal or 
beneficial interest in the consumer, or acting in a 
fiduciary or representative capacity on behalf of the 
consumer; (e) information to be released for insurance 
rate advisory organizations and other applicable rating 
agencies; (f) information to be released as required by 
various Federal and State laws, including the Right to 
Financial Privacy Act of 1978 and the Fair Credit 
Reporting Act; (g) information to be released in connection 
with sale, merger, transfer, or exchange of the financial 
institution; and (h) information to be released to identify 
or locate missing and abducted children, witnesses, 
criminals and fugitives. 

The proposed ordinance would also establish civil 
remedies and penalties for violations of the provisions of 
the proposed San Francisco Financial Information Privacy 
Ordinance of 2002, which would become operative 
January 1, 2004. Any financial institution that violates 
the terms of this proposed ordinance would be liable for 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

41 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



an administrative fine or civil penalty to be imposed by 
the City not to exceed the following amounts: 

$2,500 for negligently disclosing or sharing 

confidential consumer information, upon the first 

violation; 

$2,500 for knowingly and willfully obtaining, 

disclosing or using confidential consumer information, 

upon the first violation; 

$10,000 for knowingly and willfully obtaining, 

disclosing or using confidential consumer information, 

upon the second violation; 

$25,0000 for knowingly and willfully obtaining, 

disclosing or using confidential consumer information, 

upon the third or subsequent violation; 

$5,000 for knowingly and willfully obtaining, 

disclosing or using confidential consumer information 

for financial gain; 

$25,000 for knowingly and willfully obtaining, 

disclosing or using confidential consumer information 

for financial gain, upon the second violation; and 

$250,000 for knowingly and willfully obtaining, 

disclosing or using confidential consumer information 

for financial gain, upon a third or subsequent 

violation. 



Comments: 



1. According to Mr. Dorji Roberts of the City Attorney's 
Office, the proposed ordinance is modeled after Senate 
Bill 773, as amended in the California Senate on 
September 6, 2001. Senate Bill 773 failed to pass the 
Assembly on August 31, 2002. 



2. Mr. Roberts explains that the proposed ordinance does 
not specify which City official(s) would be responsible for 
the assessment and enforcement regarding the provisions 
of the ordinance pertaining to civil remedies and 
penalties. Mr. Roberts could not provide any estimates of 

(a) the penalties which might be realized by the City and 

(b) the related administrative costs to enforce the 
proposed ordinance. 

3. Mr. Roberts has advised the Budget Analyst that the 
Sponsor may introduce an Amendment of the Whole at 
the Committee meeting. As of the writing of this report, 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

42 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

such amendments were not available and therefore have 
not been addressed in this report. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

A3 



Memo to Finance and Labor Committee 
October 16, 2002 Finance Committee Meeting 

Item 9 - File 02-1667 



Department: Controller 

Item: Resolution establishing the City and County's Appropriations 

Limit for FY 2002-2003 pursuant to Article XIII B of the 
California Constitution. 

Description: The proposed resolution would establish $1,751,554,849 as 

the FY 2002-2003 adjusted Appropriations Limit for the City 
and County of San Francisco as required by Article XIII B of 
the California Constitution. 

On November 6, 1979, California voters approved Proposition 
4, known as the Gann Initiative, which added Article XIII B 
to the California Constitution. Article XIII B limits the 
growth of appropriations from the proceeds of taxes of the 
State of California and local governments to the percentage 
change in population for the local governmental entity and 
the percentage change in the cost of living. The California 
Government Code requires that each local government 
establish its Appropriations Limit by resolution each year. 

State Proposition 111, approved by the voters in June 1990, 
made several changes to Article XIII B (9) which are reflected 
in the City's computations. First, Proposition 111 redefined 
change in the cost of living as follows: 

"Change in the cost of living" for an entity of local 
government, other than a school district or a community 
college district, shall be either (A) the percentage change in 
California per capita personal income from the preceding 
year, or (B) the percentage change in the local assessment 
roll from the preceding year for the jurisdiction due to the 
addition of local nonresidential new construction. Each 
entity of local government shall select its change in the cost 
of living pursuant to this paragraph annually by a 
recorded vote of the entity's governing body. 

According to the State Department of Finance, the 
percentage change in California per capita personal income 
as of January of 2002 as compared to January of 2001 results 
in a 1.27 percent decrease. The Assessor's Office advises that 
the percentage change in the local assessment roll from the 
preceding year for the jurisdiction due to the addition of local 

Board of Supervisors 

Budget Analyst 

44 



Memo to Finance and Labor Committee 
October 16, 2002 Finance Committee Meeting 



nonresidential new construction is 0.68 percent for FY 2002- 
2003 compared to FY 2001-2002. The proposed resolution 
specifies that the Appropriations Limit calculations pursuant 
to Article XIII B shall use the percentage change in the local 
assessment role due to non-residential new construction from 
the previous year as the measure of "change in the cost of 
living", rather than the percentage change from the 
preceding year in per capita income because the use of the 
change in per capita income would have resulted in a lower 
Appropriations Limit calculation. 

Article XIII B permits an exclusion from appropriations 
subject to limitation for Voter-Approved indebtedness funded 
from the proceeds of taxes. Such Voter-Approved 
indebtedness funded from the proceeds of taxes for FY 2002- 
2003 totals $88,162,072 according to the Controller. 

Article XIII B as amended by Proposition 111 also states that 
appropriations subject to limitation do not include 
"appropriations required to comply with mandates of the 
Courts or the Federal Government". In that regard, the 
Controller has identified that, for FY 2002-2003, $3,857,143 
will be expended by City departments for costs related to 
toxic remediation required by the Federal Resource 
Conservation Act. 

Article XIII B (9), as amended by Proposition 111, also 
permits an adjustment to exclude appropriations for 
"Qualified Capital Outlay as defined by the legislature" from 
proceeds of taxes. This results in a reduction of $15,844,155 
for FY 2002-2003, from appropriations of proceeds of taxes 
subject to the limit for Capital Outlay. 

The Controller has computed the FY 2002-2003 
Appropriations Limit for the City and County of San 
Francisco as shown on the following page (percentages and 
computed amount have been rounded by the Controller): 



Board of Supervisors 
Budget Analyst 

45 



Memo to Finance and Labor Committee 
October 16, 2002 Finance Committee Meeting 



FY 2001-2002 Gross Appropriations Limit $1,717,059,535 

Adjusted by : 

Increase in Cost of Living 0.68% 

Increase in Population 1.32% 

FY 2002-2003 Net Appropriations Limit $1,751,554,849* 

*1.0068 times 1.0132 equals 1.020090 times $1,717,059,535. 

The Controller's Office monitors revenues subject to the 
Appropriations Limit throughout each fiscal year. At year-end, 
as part of the annual financial audit, a final computation is 
prepared comparing actual proceeds of taxes to the 
Appropriations Limit. At that time, two tests must be met. 
First, all actual proceeds of taxes must be below the 
Appropriations Limit; and second, all actual proceeds of taxes 
collected must be appropriated. If either test is not met, 
according to Article XIII B, excess revenues collected must be 
returned to the taxpayers within two 3'ears. 

As calculated by the Controller, the amount appropriated in 
the City's FY 2002-2003 budget that is subject to the 
Appropriations Limit is $1,544,346,831 which is $207,208,018 
less than the net FY 2002-2003 Appropriations Limit of 
$1,751,554,849. In accordance with the Administrative 
Provisions of the Annual Appropriation Ordinance, any FY 
2002-2003 tax proceeds in excess of current estimates will be 
appropriated to the City's General Fund General Reserve, 
which is used as a revenue source (a) to fund supplemental 
appropriations during the current fiscal year, and (b) to fund 
the City's budget for the next fiscal year. 



Recommendation: Approve the proposed resolution. 



Board of Supervisors 
Budget Analyst 

46 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

Item 10 - File 02-1668 



Department: 



Public Library 
Department of 
Division (RED) 



Administrative Services, Real Estate 



Item: 



Resolution authorizing the execution, delivery and 
performance of an Agreement of Purchase and Sale for 
Real Estate (along with all exhibits and schedules, the 
"Purchase Agreement"), between the City and County of 
San Francisco (the "City") as the Purchaser, and Ninth 
and Howard LLC, a California limited liability company 
as the Seller, (including certain indemnities contained 
therein), for the purchase of real property and 
improvements located at 190 9 th Street, San Francisco, for 
use as the Support Services Center of the San Francisco 
Public Library; and adopting findings that the convej^ance 
of the property and improvements is consistent with the 
City's General Plan and Eight Priority Policies of City 
Planning Code Section 101.1. 



Location: 



Assessor's Block No. 3509, Lot No. 008A 
190 9 th Street 



Seller: 
Size: 



Ninth & Howard LLC, the property owner 

A three story 42,292 square foot commercial building on a 
17,000 square foot parcel 



Purchase Price: 



$8,500,000 for the real property and $60,000 for personal 
property, for a total purchase price of $8,560,000 or 
$202.40 per square foot (See Comment No. 2). 



Source of Funds: 



$8,500,000 from Proposition A Branch Library Facilities 
Improvement Bond Funds, and $60,000 from the Library 
Preservation Fund appropriated in the Public Library's 
FY 2002-2003 budget. 



Description: 



Approval of the subject resolution would authorize the 
Director of Property on behalf of the City to purchase 190 
9 th Street, a three story approximately 42,292 square foot 
building on 17,000 square feet of land from the SeDer, 
Ninth & Howard, LLC for $8,560,000. The building 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 

would be used as the Support Services Center of the 
Public Library. 

The proposed resolution adopts the Planning 
Department's findings that the purchase of the subject 
property does not require California Environmental 
Quahty Act (CEQA) review and is consistent with the 
General Plan and the Eight Priority Policies of Planning 
Code Section 101.1. 

The proposed Purchase Agreement requires the City to 
assume an existing lease for a portion of the subject 
property. This lease is between Juma Ventures (Juma), a 
nonprofit organization, and the existing property owner, 
Ninth & Howard LLC. According to Ms. Carla Lieske of 
the City Attorney's Office, Ninth & Howard LLC and 
Juma will enter into a Termination Agreement as a 
condition of the Purchase Agreement, which would 
require Juma to vacate the subject property no later than 
120 days after the close of escrow (see Comment No. 4). 
The proposed resolution specifies that any revenue 
generated from the assumption of the Juma Lease 
through rents paid by Juma to the City during the up to 
120 days that Juma will continue to occupy this leased 
space would supplement the Proposition A Branch 
Library Facilities Improvement Bonds funds. 

Comments: 1. According to Ms. Susan Hildreth of the Public Library, 

Proposition A Branch Library Facilities Improvement 
Bond Funds, approved by the voters in November of 2000, 
provided for a Support Services Center for the Technical 
Services Division of the Public Library which is 
responsible for receiving and processing new books and 
materials. Currently, the Library's Technical Services 
Division is located on the ground floor of the Main 
Library, in an approximately 15,200 square foot area. 
Ms. Hildreth states that an evaluation conducted by a 
consultant, Cynthia Ripley and Associates, in 1999 
recommended that most non-public service functions of 
the Main Library be relocated to another facility outside 
of the Main Library in order to provide more space for 
public services within the Main Library. Attachment I to 
this report, provided by Ms. Hildreth, is a memorandum 
describing what the Support Service Center at 190 9 th 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

48 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



Street would be used for and the Public Library's plans 
for the 15,200 square feet of space in the Main Library 
which the Technical Service Department would vacate. 

The Budget Analyst notes that the Technical Services 
Division currently occupies approximately 15,200 square 
feet in the Main Library for use as a Support Service 
Center and the proposed building at 190 9 th Street has 
42,292 square feet of usable space, an increase of 27,092 
square feet or 178.2 percent. According to Ms. Hildreth, a 
recent study, prepared by a consultant, Cy Silver, 
recommended 23,000 square feet for the functions of the 
Technical Services Division. The Public Library has 
retained a consultant, Florence Mason Associates, to 
analyze which services, in addition to the Technical 
Services Division, would also be moved to 190 9 th Street 
from the Main Library. Ms. Hildreth states that Florence 
Mason Associates served as a subcontractor to Cynthia 
Ripley and Associates in the 1999 evaluation as described 
above. 

The Budget Analyst notes that the 190 9 th Street Building 
would have 42,292 square feet of space which is 19,292 
square feet or 83.9 percent more than the 23,000 square 
feet for the Technical Services Division functions as has 
been recommended by the Pubbc Library's own 
consultant. Ms. Hildreth believes there are enough non- 
public service library functions to fully occupy the 42,292 
square feet of the subject property. As of the writing of 
this report, the Public Library had no specific detailed 
plans and no written reports as to how the excess space of 
19,292 square feet would be utilized. 

2. According to Mr. Michael Martin of the City Attorney's 
Office, General Obligation Bond proceeds cannot be used 
for the purchase of personal property and as a result the 
purchase price of $8,560,000 was separated into two 
components: (1) real property and (2) personal property. 
Ms. Hildreth states that the General Obligation Bonds 
authorized by Proposition A Branch Library Facilities 
Improvement Bonds in the amount of $105,865,000 
($23,300,000 was appropriated in the FY 2002-2003 
budget of the Public Library) would fund $8,500,000 or 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

49 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



99.3 percent of the total purchase price of $8,560,000 for 
the real property component of the purchase price. 

The remaining $60,000 would be funded by the Public 
Library's FY 2002-2003 operating budget from the 
Library Preservation Fund for the personal property 
component of the purchase price which includes work 
cubicles, office furniture, kitchen appliances, and other 
miscellaneous office supplies. According to Ms. Hildreth, 
the Public Library has evaluated the furnishings and 
equipment at the subject property and has determined 
that the furnishings and equipment meet the Public 
Library's needs. Attachment II to this report, provided by 
Mr. Charlie Dunn of the Real Estate Division of the 
Department of Administrative Services, provides 
additional details regarding the personal property 
consisting of furniture and equipment. 

3. According to Mr. Dunn, on September 5, 2002, an 
independent appraiser engaged by the Department of 
Real Estate, Ricci and Associates conducted an appraisal 
of the 190 9 th Street parcel and improvements. The 
appraiser valued the property, including the furniture 
and equipment at $8,560,000. Mr. Dunn states that the 
purchase price is consistent with the Real Estate 
Division's opinion of the fair market value of the subject 
property. 

4. As previously noted, under the terms of the Purchase 
Agreement, the City would assume a lease with an 
existing tenant of Ninth & Howard LLC, Juma Ventures 
(Juma), a nonprofit organization that provides job 
employment assistance. The Agreement would allow 
Juma to continue renting 9,459 square feet of the ground 
floor at 190 9 th Street for up to 120 days after the close of 
escrow at $19,706 per month, which is the same rent 
Juma has paid Ninth & Howard LLC. According to Ms. 
Hildreth, Juma is the only current lessee of the subject 
property. According to Mr. Dunn, a short term lease with 
Juma, the existing tenant, is necessary because Ninth & 
Howard LLC will not terminate its lease with Juma prior 
to the close of escrow and Juma will need time to relocate. 
Mr. Dunn notes that Juma's rent of $19,706 per month is 
above current market rates and consequently Juma has 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

50 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



an incentive to relocate. Additionally, the Purchase 
Agreement requires that $500,000 from the purchase 
price, payable to Ninth & Howard LCC, be retained by the 
City until Juma has vacated the property. 

5. Attachment III to this report, provided by Mr. George 
Nichols of the Public Library, details the estimated 
ongoing annual operating costs of $196,366, the estimated 
one-time costs of $312,300, and the estimated facility 
improvement costs of $196,520, for a total first year cost 
of $705,186. Ms. Hildreth notes that the planned 
improvements, which would be completed either by the 
Department of Public Work's Bureau of Building Rep an- 
on an in-house basis or through a competitive bid process, 
would begin the Spring of 2003 and would be completed 
by the Summer of 2003. According to Ms. Hildreth, the 
Public Library's Technical Services Division would not 
move into 190 9 th Street until July of 2003. 

6. According to Mr. Nichols, the annual estimated 
operating costs of $196,366 include $86,000 for a half-time 
Stationary Engineer and a full-time Custodian. Mr. 
Nichols states that the operating costs would be funded by 
the Library Preservation Fund. However, because the 
property would not be ready for the Public Library to 
occupy until July of 2003, Mr. Nichols notes that the 
Public Library will request appropriation approval from 
the Board of Supervisors for operating costs in the FY 
2003-2004 budget of the Public Library. 

7. Mr. Nichols states that the planned improvements to 
the subject property would include converting the parking 
area and ground floor windows into a truck loading dock, 
at an estimated cost of $178,520, and modifying existing 
work stations at an estimated cost of $18,000, for a total 
improvement cost of $196,520. The Budget Analyst 
recommends that the proposed resolution include a not to 
exceed amount of $200,000 for the facility improvements, 
unless separate approval is obtained from the Board of 
Supervisors. Ms. Hildreth recommends a not to exceed 
amount of $250,000. 

8. According to Mr. Nichols, the one-time moving and 
setup costs, estimated at $312,300, includes custodial 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



equipment ($6,300), the purchase of book trucks 
($26,000), security system setup ($30,000) and 
telecommunications work ($250,000). Mr. Nichols states 
that the Public Library is in the process of verifying with 
the Department of Telecommunications and Information 
Services (DTIS) the cost estimate of $250,000 for one-time 
expenditures to obtain telecommunications work provided 
by the DTIS. The Budget Analyst recommends that the 
proposed resolution be amended to reserve $250,000 
pending submission of a detailed budget from the DTIS. 



Recommendations: 1. Amend the proposed resolution to include a not to 

exceed amount of $200,000 for the facility improvements 
without further Board of Supervisors approval. Ms. 
Hildreth recommends a not to exceed amount of $250,000. 

2. Amend the proposed resolution to reserve $250,000 
pending submission by DTIS of a detailed budget to the 
Finance Committee. 

3. The Public Library's own consultant recommended a 
need of 23,000 square feet for the proposed Support 
Services Center. The proposed acquisition of 190 9 th 
Street, which has 42,292 square feet of space, is 19,292 
square feet or 83.9 percent more space than the 23,000 
square feet recommended by the Public Library's own 
consultant and is 178.2 percent more space than the 
15,200 square feet of space currently used by the 
Technical Services Division in the Main Library for a 
Support Service Center. Further, as of the writing of this 
report, the Public Library had no detailed plan and no 
written report as to how the excess space, consisting of 
19,292 square feet, would be utilized. Therefore, the 
Budget Analyst considers approval of the proposed 
resolution, as amended, to be a policy matter for the 
Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

52 



Memo to Finance Committee 

October 16, 2002 Finance Committee Meeting 



v4 r x— 

Harvey M. Rose 




cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

53 



OCT 09 2002 1B:54 SF PUBLIC LIBRRRY 415 557-4239 p. 2 

Attachment I'. 



San Francisco Public Library 

100 LarHn Street, San Francisco, CA 94102 



October 9, 2002 

To: Elaine Forbes, Budget Analyst 
Budget Analyst' s Office 

From : Susan Hildreth, City Librarian U3; 

Re: 190 9 th St. 

Uses of 190 9" 1 St. 

190 9 th St. will be used primarily to provide space for the Technical Services Department 
of the San Francisco Pub he Library. This department is responsible for ordering, 
cataloging and preparing for circulation all the materials that are acquired by the Library. 
The Collection Development Department, responsible for selecting all materials that are 
ordered by the Library, will also be housed in 190 9 th St. We anticipate locating the 
Library's materials distribution clearinghouse function there, where materials from all 
library locations are sorted for delivery to other locations, as materials requested by users 
move throughout the library system on a daily basis. We are currently working with 
library consultant Florence Mason, who worked on the Post Occupancy Evaluation of the 
Main Library, in identifying other appropriate non-public departments that can be 
relocated from the Main Library to 190 9 th St. 

Technical Services Current Location 

Currently, the Technical Services Department is on the first floor of the Main Library and 
occupies 1 5,200 square feet. The space is cramped, was not designed for this department 
and does not provide an ergonomically-correct environment for these functions. A recent 
space study of Technical Services recommends 23,000 square feet for all these functions. 

Reutilization of Technical Services Space in Main Library 

The Post Occupancy Evaluation ( POE) recommended that Technical Services be 
relocated from the first floor of the Main Library, with the resulting available space being 
used for public space. When Technical Services has relocated, the Library plans to make 
that space available for Main Library use. We anticipate moving parts of collections 
from other floors in the Main Library to the 1 st floor, primarily all fiction and large-print 
Department The source of funds for these proposed modifications will be the Library 
Improvement Fund, which is comprised primarily of unspent bond money and interest 
from the Main Library bond as well as funds from Litigation settlements from the Main 
Library construction 



54 



OCT-10-2002 13=52 



CCSF REPL ESTATE DEPT 



City and County of San Francisco 




Attachment II 

Real Estate Division 
Department of Administrative Services 



MEMORANDUM 



October 10, 2002 



TO: Elaine Forbes 

Budget Analyst 

FROM: Charlie Dunn 

Real Estate Division 



^~KA— 



SUBJECT: Personal Property at 190 9 ,h Street 



As we discussed, the personal property was delineated from the purchase price only to meet the 
City's bond fund requirements (bond funds can not be used for the purchase of personal property 
or services). 

The City will be receiving at close of escrow the 4 pages of personal property attached to the 
Purchase and Sale Agreement as Exhibit B. While the Real Estate Division is not directly 
involved in City office furniture purchasing, over the past 12 years, I have been involved in 
multiple lease transactions where the departments have bought new furniture to be installed. It is 
not uncommon for a base 6' x 8' workstation costing $2,500-3000 to actually cost the City 
$4,000-5,000 each when Sales Tax, Delivery, Installation, Chair, File Cabinet, Task light and 
conference room furniture are included. 

190 9* St. contains more than 80 workstations, 6 offices of furniture and 3 conference rooms full 
of quality furniture. 

Calculating on only the 86 workstations and offices and thus giving no value to the conference 
room and other items, the $60,000 works out to be approximately $700 per station and office. 
Using 8.25% sales tax ($58) and $350 for installation, the net price is less than S300 for a full 
workstation and/or office. 

In addition to the above per unit value, by having the existing workstations already wired, the 
City will be saving substantial moneys on telephone, data, and electrical costs. Ms. Flash Gordon 
of DTIS has inspected the property and estimates the data and telephone cost savings to the City 
at more than $50,000. 

Please call me if you have questions at 554-9861. 

CDAvp/54/5482/190 S^/furniture cost 



(415)554-9850 
FAX: (415) 552-9216 



Office of the Director of Property 
25 Van Ness Avenue, Suite 400 

55 



San Francisco, CA 94102 

TOTAL P. 02 



OrT.07 2002 2:55PM SF PUBLIC LIBRRRY - FINRN 415 437 4830 



P . 3 



10/7/2002 



Attachment- Hi 



COST ESTIMATE 190 - 9th STREET 



D 



CATEGORY 



ITEM 



FTE 



Estimated 
Cost 



Notes 



Stating | Stationary Engineer 


0.50 


S 39,520 


Based on mid-step as of 7/1/02 




Custodian 


1.00 


S 29,965 


Based on mid-step as of 7/1/02 




Fringe Benefits 


0.00 


S 16701 




[SUBTOTAL 


1.50 


S 86,186 





Utilities 


Gas, electric, water 




S 


43,480 


Based on 25 Van Ness. S0.97/sf. 




Scavenger service 




s 


12,000 






Sewer/water 




s 


7,500 






SUBTOTAL 


0.00 


s 


62,980 














Equip Maint. 


HVAC 




$ 


8,000 






Elevators 




s 


7,000 






Security system 




s 


4,500 






Fire/Life safety system 




s 


3,000 






SUBTOTAL 


0.00 


$ 


22,500 














Bldg. Maim. 


Window cleaning 




s 


4,000 






Pesl Control 




s 


3,000 






SUBTOTAL 


0.00 


% 


7,000 














MbL £ Supplies 


Carpelnry 




$ 


4,000 






Plumbing 




s 


2,000 






Painting 




5 


1,200 






Hardware 




s 


2,500 






Lighting 




s 


4,000 | 




Custodial 




s 


4,000 | 


_jSUBTOTAL 


0.00 


$ 


17,700 












ITOTAL ONGOING 


1.50 


s 


155,366 














Ore-Time Costs 


Equipment 




$ 


B.300 


3Hepavacs ($1,200); Carpet shampooer 
($1,000): Carpet extractor ($1,000); Pressure 
washer ($2,O00); 2 blowers ($B00); wet dry vac 
($500) 




One-time set-up (security monitoring) 




$ 


3D.0O0 






Book Trucks 




5 


25,000 






Telecommunications 




S 


250,000 


f-unded Dy branch Horary improvement bona 
Funds budgeted for relocation.. 




SUBTOTAL ON E-TIMES 


0.00 


* 


312,300 
















TOTAL, FIRST YEAR COSTS 


1.50 


$ 


506,366 
























Tenent Imprv. 


Loading dock - mechanical lifl 




$ 


178.520- 






Modification of Workstations 




s 


18,000 






SUBTOTAL, Tl 


0.00 


$ 


196,520 


Funded by Library Imrpovement Fund 












GRAND TOTAL 


1.50 


s 


705.1B5 





FILENAME =190 9TH STREET OPERATIONS COSTS 



56 



City and County of San Francisco 
Meeting Minutes 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

Finance Committee 94102-4689 



Members: Supervisors Aaron Peskin, Chris Daly and Sophie Maxwell 
Clerk: Gail Johnson 



Wednesday, November 06, 2002 12:30 PM City Hall, Room 263 

Regular Meeting 



Members Present: Aaron Peskin, Chris Daly, Sophie Maxwell. 



MEETING CONVENED 



The meeting convened at 1 1:46 a.m. 
021647 [Federal grant funds of $9,375,000 for building the South Basin Bridge in San Francisco] 
Supervisor Maxwell 

Resolution authorizing the Director of Public Works to accept and expend $9, 375, 000 in federal 
Transportation Equity Act for the 21st Century (TEA21) Demonstration Funds with required local matching 
funds of $2,344,000 to undertake environmental studies related to the feasibility of building the South Basin 
Bridge in the City and County of San Francisco. 

(Fiscal impact; No Public Benefit Recipient.) 

9/30/02, RECEIVED AND ASSIGNED to Public Works and Public Protection Committee. 

10/4/02, TRANSFERRED to Finance Committee. 

10/16/02, CONTINUED. Heard in Committee. Speakers: Stanley Muraoka, Project Manager, Redevelopment Agency; Don Capobres, 

Senior Project Manager, Redevelopment Agency, Tina Olson, Department of Public Works; Harvey Rose, Budget Analyst, 

Continued to 11/6/02. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Tina Olson, Department of Public Works. 

Amended as follows: 

On page 1, lines 6 and 24, by replacing "$2,344,000" with "52.343,750;" 

On page 1, line 7, after "San Francisco, " by adding "provided that no general fund monies will be allocated to 

the project; placing $7,497,891 on reserve;" 

On page 2, by adding the following Further Resolved clauses: 

"FURTHER RESOL VED, That no general fund monies will be used to provide a local match to this grant or 
to construct the final project, and, be it 

"FURTHER RESOLVED, That funds in the amount of $7,497,891 are hereby placed on reserve, pending 
completion of the preliminary environmental study, to be released by the Finance Committee." 
AMENDED. 

Resolution authorizing the Director of Public Works to accept and expend $9,375,000 in federal 
Transportation Equity Act for the 21st Century (TEA21) Demonstration Funds with required local matching 
funds of $2,343,750 to undertake environmental studies related to the feasibility of building the South Basin 
Bridge in the City and County of San Francisco, provided that no general fund monies will be allocated to the 
project; placing $7,497,891 on reserve. 

(Fiscal impact; No Public Benefit Recipient.) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 

City and County of San Francisco 1 Primed at 11:>I> I U on 3 3 "J 



Finance Committee 



Meeting Minutes 



November 6, 2002 



020994 [Approve expenditure of funds for emergency contract CW-336E] 
Supervisor Gonzalez 

Resolution approving the expenditure of funds for emergency contract CW-336E in the amount of $441,000 to 
replace variable frequency drives for main lift pumps at the Southeast Water Pollution Control Plant. (Public 
Utilities Commission) 

(Fiscal impact; No Public Benefit Recipient.) 

9/25/02, RECEIVED AND ASSIGNED to Finance Committee. 

10/16/02, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Jon Loiacono, Manager, Environmental 

Engineering for Water Pollution Control, Public Utilities Commission; Theodore Lakey, Deputy City Attorney; Edward Harrington, 

Controller. 

Continued to 11/6/02. 

Heard in Committee. Speakers: Theodore Lakey, Deputy City Attorney; Cheryl Davis, Assistant General 
Manager of Operations, Water Department. 
RECOMMENDED by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 



021667 [Fiscal Year 2002-03 California Constitution Appropriations Limit] 

Resolution establishing the appropriations limit for Fiscal Year 2002-03 pursuant to California Constitution 
Article XIII B. (Controller) 

(No Public Benefit Recipient.) 

10/2/02, RECEIVED AND ASSIGNED to Finance Committee. 

10/16/02, CONTINUED. Speakers; None. 

Continued to 11/6/02. 

Heard in Committee. Speakers: Monique Zmuda, Deputy Controller; Harvey Rose, Budget Analyst. 
RECOMMENDED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Absent: 1 - Daly 



021671 [Reserved Funds, Board of Supervisors] 

Hearing to request release of reserved funds, Board of Supervisors fiscal year 2002-03 budget, in the amount of 
5318,000 for the continuation of the Official Advertising contract with the San Francisco Independent for the 
period January 1, 2003 through June 30, 2003. (Board of Supervisors) 

1 1/6/02 - Supervisor Daly Dissenting in Committee 

9/27/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Gloria Young, Clerk of the Board. 

Release of reserved funds in the amount of $288,200 approved. 

APPROVED AND FILED by the following vote: 

Ayes: 2 - Peskin, Maxwell 

Noes: 1 - Daly 



City and County of San Francisco 



Printed at 11:50 AM on 3/3/04 



Finance Committee 



Meeting Minutes 



November 6, 2002 



021773 [Accept-Expend State Grant - $1,000,000] 
Supervisors Peskin, Daly 

Resolution authorizing the San Francisco Port Commission to accept and expend grants in the total amount of 
One Million Dollars ($1,000,000) from the California Coastal Conservancy, the Association of Bay Area 
Governments San Francisco Bay Trail Project, the California Transportation Commission Environmental 
Enhancement and Mitigation Program and the State of California Wildlife Conservation Board for the Ferry 
Terminal Public Pier Project. 

(No Public Benefit Recipient.) 

10/21/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Dan Hodapp, Port; Harvey Rose, Budget Analyst. 
Supervisor Daly added as co-sponsor. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021774 [Accept-Expend State Grant - $500,000.00] 
Supervisor Peskin 

Resolution authorizing the San Francisco Port Commission to accept and expend a federal grant in the amount 
of $500,000.00 from the Federal Transportation Security Administration to fund the Port's security assessment 
efforts. 

(No Public Benefit Recipient.) 

10/21/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Taline Sanassarian, Port. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



021715 [Lease of Real Property] 

Resolution authorizing a new lease of real property at 1305 and 1309 Evans Avenue on behalf of the 
Department of Public Health, Children's System of Care and Family Mosaic. (Real Estate Department) 

(Public Benefit Recipient; District 10.) 

10/9/02, RECEIVED AND ASSIGNED to Finance Committee. 

10/25/02, REFERRED TO DEPARTMENT. Referred to Youth Commission for comment and recommendation. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst. 
RECOMMENDED., by the following vote: 

Ayes: 3 - Peskin, Daly, Maxwell 



City and County of San Francisco 



Primed at U:S1 IW 



Finance Committee Meeting Minutes November 6, 2002 



021716 |Airport S3.5 Million Federal Grant] 

Resolution authorizing the Airport Commission to accept and expend grant funds in the amount of 
$3,503,877.00 from the U. S. Department of Transportation's Federal Aviation Administration for the purpose 
of reimbursing airports for extraordinary operating costs incurred as a result of the events of September 1 1 , 
2001 as authorized by the Aviation and Transportation Security Act of 2001. (Airport Commission) 

(Public Benefit Recipient.) 

10/9/02, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cathy Widener, Airport; Kevin Kone, Airport; 
Ben Rosenfield, Mayor's Budget Office. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Peskin, Daly, Maxwell 



ADJOURNMENT 



77ie meeting adjourned at 1:33 p.m. 



City and County of San Francisco 4 Printed at 11:51 AM on 3/3/04 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



CITY AND COUNTY 




OF SAN FRANCISCO 

/ 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 

October 31, 2002 



TO: ^Finance Committee 

FROM: Budget Analyst 

SUBJECT: November 6, 2002 Finance Committee Meeting 



DOCUMENTS DEPT. 
NOV - 5 2002 

SAN FRANCISCO 
PUBLIC LIBRARY 



Item 1 - File 02-1647 

Note: This Item was continued by the Finance Committee at its meeting of 
October 16, 2002. 



Department: 
Item: 



Grant Amount: 
Grant Period: 



Source of Funds: 



Department of Public Works (DPW) 

San Francisco Redevelopment Agency (SFRA) 

Resolution authorizing the Director of the Department of 
Public Works to accept and expend $9,375,000 in Federal 
Transportation Equity Act for the 21 st Century (TEA21) 
Demonstration Funds with required local matching funds 
of $2,344,000 to undertake environmental studies related 
to the feasibility of building the South Basin Bridge in the 
Citjr and County of San Francisco. 

$ 9,375,000 

October 1, 2001 to September 30, 2011 (10 years, See 
Comment No. 5) 

U.S. Department of Transportation, Federal Highway 
Administration (FHWA) 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



Required Match: 

Indirect Costs: 

Project: 

Description: 



20% or $2,343,750 from the SFRA (See Comment Nos. 3 
and 6) 

Indirect costs are not allowed by the granting agency. 

South Basin Bridge Project 

The proposed resolution would authorize the Director of 
the Department of Pubhc Works (DPW) to accept and 
expend $9,375,000 of FHWA Demonstration Funds for the 
undertaking of environmental studies related to the 
feasibility of building the South Basin Bridge. As shown 
in the map in Attachment I provided by Ms. Tina Olson of 
the Department of Pubhc Works, the South Basin Bridge 
is proposed to be located between Candlestick Point and 
Hunters Point, with an exact location to be determined 
after the environmental studies are completed. The San 
Francisco Redevelopment Agency (SFRA) would provide 
the required 20 percent local matching funds in the 
amount of $2,343,750 over the four-year life of the 
environmental studies, for a total project budget of 
$11,718,750. 

The environmental studies related to the feasibility of 
building the South Basin Bridge would be conducted 
using the subject grant funds, of $9,375,000, together 
with the local match of $2,343,750, for a total project cost 
of $11,718,750. The project would include a formal 
environmental review process required by State and 
Federal law that would produce an Environmental Impact 
Report (EIR) and an Environmental Impact Statement 
(EIS). Such environmental studies would also include a 
water habitat study, a hazardous-materials study, a 
location hydraulic study, a water quality study and a 
traffic study. Ms. Olson indicates that the environmental 
studies are expected to be completed by Fiscal Year 2005- 
2006. According to Ms. Olson, these environmental 
studies would be the initial phase of a larger project to 
design and construct the South Basin Bridge, which has 
an estimated total project cost ranging between $110 
million to $150 million, according to the DPW. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

Ms. Olson advises that the South Basin Bridge would 
provide a more direct route to access Hunters Point 
Shipyard from Highway 101, in order to induce 
commercial development as well as support revitalization 
of the Shipyard. The South Basin Bridge would also 
redirect truck traffic away from local residential streets, 
according to Ms. Olson. The Bridge is intended to also 
accommodate the future extension of the Municipal 
Railway's 3 rd Street Light Rail Project to the Shipyard. 
As noted above, the entire South Basin Bridge Project, 
including the costs for the proposed environmental 
studies, has a total estimated budget ranging between 
$110 million to $150 million. Ms. Olson advises that 
funding sources to construct the Bridge have not been 
identified as of the writing of this report. 

Budget: Attachment II, provided by the DPW, contains the budget 

for the South Basin Bridge Project environmental studies 
totaling $11,718,750, including $9,375,000 in subject 
Federal grant funds and $2,343,750 in SFRA matching 
funds. 

Comments: 1. As shown in Attachment II, provided by Ms. Olson, 

DPW intends to spend an estimated $9,372,364, out of the 
total project budget of $11,718,750, on environmental 
consultant contracts to conduct the necessary 
environmental studies. Ms. Olson advises that DPW 
plans to issue a RFP/RFQ in December of 2002, select a 
consultant during the Summer of 2003 and award a 
contract to a consultant by October of 2003, or in 
approximately one year from now. According to Ms. Olson, 
the selected consultant may sub-contract some of the 
specific studies to other firms. As noted above, the 
environmental studies are anticipated to be completed in 
FY 2005-2006. 

The Budget Analyst notes that since the RFP/RFQ has 
not yet been issued, the DPW cannot identify the prime 
and sub- consultants that will be selected, the hourly 
rates or the total cost of the consultant contracts. 
Therefore, the Budget Analyst recommends that 
$9,372,364 for the outside consultant contracts be placed 
on reserve by the Finance Committee pending 
identification of the actual consultants and submission to 
the Finance Committee of total costs including estimated 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



hours and hourly rates. Ms. Olson disagrees with this 
recommendation because she states that the City's 
process for reviewing and approving consultant contracts 
already provides for extensive oversight including: (1) 
HRC review and approval the RFP; (2) Civil Service 
Commission review and approval of the proposed use of 
consultants; (3) the entire consultant selection process is 
overseen by HRC; and (4) the final contract is reviewed 
and approved by the Department Head, the Purchaser, 
the City Administrator and the City Attorney. Further, 
Ms. Olson states that for Federally funded transportation 
projects such as this project, Caltrans also performs a pre- 
award audit of the consultants' rates and internal controls 
and must approve the consultant contracts. According to 
Ms. Olson, because of the extensive City and Caltrans 
review and approval process for these consultant 
contracts, DPW estimates that it will take one year to 
have a consultant team on board for this project. Thus, 
Ms. Olson advises that it seems unnecessary to have the 
Board of Supervisors also review the consultant contracts. 

2. As detailed in Attachment II, DPW will expend an 
estimated $2,346,386 to fund in-house DPW staff to 
initially develop the RFP/RFQ and then to oversee and 
support the consultant's activities in relation to the 
environmental studies. 

3. The proposed grant requires a 20 percent match, or 
$2,343,750, of the total project costs of $11,718,750. 
According to Ms. Olson, the SFRA included $180,000 of 
such local matching funds for the South Basin Bridge 
Project in the SFRA's FY 2002-2003 budget, as previously 
approved by the Board of Supervisors. This leaves a 
remaining local match balance of $2,163,750 ($2,343,750 
total match required less $180,000 budgeted in FY 2002- 
2003). According to Mr. Don Capobres of the SFRA, and 
as shown in Attachment II, the SFRA intends to provide 
matching funds averaging $721,250 per year for three 
additional fiscal years (Fiscal Years 2003-2004 through 
2005-2006), or a total of $2,163,750 from (a) proceeds from 
the sale of land at the Hunters Point Shipyard, (b) grants 
funds and (c) developer contributions. However, as of the 
writing of this report, Mr. Capobres cannot identify the 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



specific funding sources for the remaining local match 
requirement of $2,163,750. 

4. Ms. Olson reports that the Board of Commissioners of 
the San Francisco County Transportation Authority 
placed the South Basin Bridge Project on its Project 
Priorities List and approved the South Basin Bridge 
Project for incorporation into the 2001 Regional 
Transportation Plan of the Metropolitan Transportation 
Commission for the nine-county San Francisco Bay Area. 

5. Attachment III, provided by the DPW, is the 
Department's Grant Information Form, including the 
Disability Access Checklist. Attachment III indicates a 
start date of October 1, 2001. However, Ms. Olson advises 
that the California Department of Transportation 
(Caltrans), the grant pass-through agency, only approved 
the subject grant amount on September 11, 2002 and 
DPW has until September 30, 2011 to expend the subject 
grant funds, or a period of over nine years. Ms. Olson also 
advises that none of the subject grant funds have been 
accepted or expended to date. 

6. Ms. Olson advises that the proposed resolution 
incorrectly states that the required local matching funds 
are $2,344,000. As shown in Attachment II, the required 
local matching funds are $2,343,750. Therefore, the 
proposed resolution should be amended to reflect the 
correct amount of matching funds. 

7. Given (1) that the subject Federal grant of $9,375,000 
requires a 20 percent local match of $2,343,750, with no 
identification of specific funding sources except for 
$180,000 and (2) that the entire South Basin Bridge 
Project has a total estimated project cost ranging between 
$110 million to $150 million, for which funding sources 
have not yet been identified, the Budget Analyst considers 
approval of the proposed resolution to be a policy matter 
for the Board of Supervisors. 

8. At the request of the Finance Committee, Ms. Olson 
has submitted a memorandum (Attachment IV) which 
provides additional information on the South Basin 
Bridge Project and which reports on cost estimates for the 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

5 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

environmental studies obtained from the following three 
consultants: Jones and Stolk, Enviro Solutions and 
Environmental Science Associates (ESA). Ms. Olson 
reports that the three cost estimates ranged from a low of 
$2.6 million to a high of $15 million. Ms. Olson concludes 
that, "In summary, we are confident that we will be able 
to fund the required local match of $2,343,750 with non- 
General Fund sources. It is unclear how much we will 
eventually need to complete the EIR/EIS/PE phase of the 
South Basin Bridge project since various environmental 
review and project management professionals have 
estimated it will cost between $2.6 to $15 million. 
However, it seems likely to be at least 5% of the projected 
total project cost or $5.5 to $7.5 million. If the 
environmental review phase is less than the estimated 
$11,718,650, we will re-program the balance of the grant 
to the subsequent project phases of detailed design and 
construction. We will award a consultant contract up to a 
maximum of $9,372,364 but will issue task orders for each 
project scope/phase that has a negotiated budget with 
consultant staff assignments, hours and hourly rates. In 
that way, we can better manage the costs of the 
environmental review and minimize the use of both the 
federal grant and local matching funds for this phase of 
the project." 

9. Given that the new cost estimates obtained by Ms. 
Olson for the environmental consultant services have a 
significant range of $2.6 million to $15 million, the 
Budget Analyst again recommends that the $9,372,364 for 
such outside consultant services be reserved pending 
submission to the Finance Committee of the final cost 
details pertaining to the consultant contracts after the 
consultants have been selected by the DPW. 

Recommendations: 1. In accordance with Comment Nos. 1 and 9, amend the 

proposed resolution by reserving $9,372,364 for the 
environmental consultant contracts pending identification 
of the outside consultants and submission to the Finance 
Committee of total costs, including estimated hours and 
hourly rates. As noted previously, Ms. Olson disagrees 
with this recommendation because she states that the 
City's process for reviewing and approving consultant 
contracts already provides for extensive oversight 
including: (1) HRC review and approval the RFP; (2) Civil 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



Service Commission review and approval of the proposed 
use of consultants; (3) the entire consultant selection 
process is overseen by HRC; and (4) the final contract is 
reviewed and approved by the Department Head, the 
Purchaser, the City Administrator and the City Attorney. 
Further, Ms. Olson states that for Federally funded 
transportation projects such as this project, Caltrans also 
performs a pre-award audit of the consultants' rates and 
internal controls and must approve the consultant 
contracts. According to Ms. Olson, because of the 
extensive City and Caltrans review and approval process 
for these consultant contracts, DPW estimates that it will 
take one year to have a consultant team on board for this 
project. Thus, Ms. Olson advises that it seems 
unnecessary to have the Board of Supervisors also review 
the consultant contracts. 

2. In accordance with Comment No. 6, amend the 
proposed resolution by substituting $2,343,750 for 
$2,344,000 on page 1, line 6 and line 24. 

3. In accordance with Comment No. 7, approval of the 
proposed resolution, as amended, is a policy matter for 
the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Attachment I 



,.-, ; Milton Meyer 
5^. jRtct eatiuti, /. >r 




rpGOtim 
3l80Oft; 



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S a n_ Fraunc r s co 
San Mateo 



Attachment II 
Page 1 of 2 



South Basin Bridge Project 








Total Federal Grant 


$9,375,000 






Local Match @ 20% 


2,343,750 






Total 


11,718,750 






Cash Flow Analysis: 








EIR/Planninq/PE/Desian 


Total 


Fed 


Local 


2002-03 


$900,000 


$720,000 


$180,000 


2003-04 


3,606,250 


2,885,000 


721,250 


2004-05 


3,606,250 


2,885,000 


721,250 


2005-06 


3,606,250 


2,885,000 


721,250 



$11,718,750 $9,375,000 $2,343,750 



Attacnment: 11 
Page 2 of 2 



South Basin Bridge Project-Environmental Phase 
Engineer's Estimate of Costs for Environmental Analysis 



Total Federal Grant 9,375,000 

Local Match @ 20% 2,343,750 

Total $11,718,750 



Environmental Consultant Contracts $9,372,364 

Environmental Review (EIR/EIS/CEQA/NEPA) 

Cultral Resources Study(Historic Preservation) 

Water Habitat Study 

Hazardous Materials Study and Investigations 

Location Hydraulic Study 

Natural Environment Study (Water Quality) 

Traffic Study 



DPW Staff Costs 


$2,346,386 








DPW Staff Costs 










Project Management 


Classification 


Hourly Rate 


Hours 


Extension 


Project Manager III 


5506 


$155 


10,376 


$1,603,481 


Manager Regulatory Affairs 


9398 


122 


2,283 


277,795 


Senior Clerk Typist 


1426 


59 


156 


9,263 


Engineering 








- 


Civil Engineer 


5241 


121 


1,556 


188,828 


Assistant Civil Engineer 


5203 


88 


726 


64,155 


Civil Engineer Associate I 


5364 


74 


311 


22,934 


Site Assessment Remediation (Chemist) 


2488 


107 


726 


77,604 


Surveys 








50,000 


Student Intern 


5382 


54 


792 


43,063 


Senior Clerk Typist 


1426 


59 


156 


9,263 


Total DPW Staff Costs 








$ 2,346,386 



NOTES: 

1. Preliminary Total Project Cost is between $110 to $150 million for this project. 

2. Hourly Rates are based on the current FY02-03 rate and does not account for inflation 

10 



Attachment III 
Page 1 of 2 
File Number: 

(Provided by Clerk of Board of Supervisors) 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: Transportation Equity Act for the 21 st Century Demonstration Funds (Demo Funds) 

2. Department: Public Works 

3. Contact Person: Tina Olson Telephone: 554-4830 

4. Grant Approval Status (check one): 

X Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $ 9,400,000 

6a. Matching Funds Required: $ 2,350,000 
b. Source(s) of matching funds (if applicable): SFRA funds 

7a. Grant Source Agency: U.S. Department of Transportation, Federal Highway Administration (FHWA) 
b. Grant Pass-Through Agency (if applicable): California Department of Transportation (Caltrans) 

8. Proposed Grant Project Summary: 

South Basin Project 

Project Limits: 



9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: October 1 , 2001 End-Date: September 30, 201 1 

10. Number of new positions created and funded: -0- 

1 1 . If new positions are created, explain the disposition of employees once the grant ends? 

12a. Amount budgeted for contractual services: 59,375,000 

b. Will contractual services be put out to bid? Yes 

c. If so, will contract services help to further the goals of the department's MBE/WBE 

requirements? Yes 

11 



Attachment III 
Page 2 of 2 

d. Is this likely to be a one-time or ongoing request for contracting out? One-time 

13a. Does the budget include indirect costs? [ ] Yes [X] No 

b1. If yes, how much? $ 

b2. How was the amount calculated? 

c. If no, why are indirect costs not included? 

[X] Not allowed by granting agency [ ] To maximize use of grant funds on direct services 

[] Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[X] Existing Site(s) [ ] Existing Structure(s) [ ] Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ j Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

[ ] New Site(s) [ ] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: Included in the scope of work will be the installation of new curb ramps in accordance with the 
Federal Americans with Disability Act (ADA). 



Departmental or Mayor's Office of Disability Reviewer:. 



Kevin Jensen 
Date Reviewed: 



Department Approval 




Director of Public Works 



(Signature) 



12 



City and County of San Francisco 



Attachment IV 
Page 1 of b 




Willie Lewis Brown, Jr., Mayor 
Edwin M. Lee, Director 



pgs_ Phone: (415) 554-6920 

&£P Fax: (415) 554-6944 

TDD: (415) 554-6900 

http://www.sfdpw.com 



Department of Public Works 

Finance and Budget Division 

City Hall, Room 340 

1 Dr. Carlton B. Goodlett Place 

San Francisco, CA 94102-4645 

Tina Olson, Division Manager 



Memorandum 



Date: 



October 30, 2002 



To: Supervisor Peskin, Chair, Finance Committee 

Supervisor Daly, Vice Chair 
Supervisor Maxwell 

From: Tina Olson, Department of Public Works (DPW) 

Don Capobres, San Francisco Redevelopment Agency (SFRA) 

Subject: South Basin Bridge - Environmental Impact Report/Environmental 

Impact Statement/Preliminary Engineering (EIR/EIS/PE) Cost Estimates 
and Match Sources to the Grant 

As requested, the following is a summary of (1) potential local match sources to the 
South Basin Bridge project's S9.4 million federal grant and (2) discussions with 
environmental review consultants and other professionals in the environmental review 
field on the estimated cost to complete the EIR/EIS/PE phase of the South Basin Bridge 
project. 

Oveiyieiv of $9.4 Million Federal Grant 

The S9.4 million federal grant is an earmark that the City received in 1998 for the South 
Basin Bridge project. The City must obligate the S9.4 million federal grant for the South 
Basin Bridge project before September 30, 2003 or lose the grant funds. Since the City 
doesn't have an approved EIR/EIS report on the project, the City must obligate the entire 
S9.4 million grant for environmental review. If the City uses less than the $9.4 million 
grant on the environmental review phase and there is a viable project, we will re-program 
the balance to the subsequent project phases: detailed design and construction. 

The $9.4 grant for the South Basin Bridge will be provided on a reimbursement basis. 
Since Caltrans will not provide a lump sum payment, the Agency is not required to 
provide the entire local match up front. This method of reimbursement allows for the 
project and related local match requirements to grow over time. At this time, we expect to 



"IMPROVING THE QUALITY OF LIFE IN SAN FFiANCISCO" We are dedicated individuals committed to teamwork, 
customer service and continuous improvement in partnership with the community. 
Customer Service Teamwork Continuous Improvement 

13 



Attachment IV 
Page 2 of 5 
Memo to Finance Committee 

South Basin Bridge Project 
October 30, 2002 
Page 2 

complete the EER/EIS document in four years. Thus, we will drawdown the grant and 
matching funds required for the environmental review over the next four years. 

We plan on managing the environmental review consultant contract through task orders. 
That is, we will award a consultant contract up to a maximum of $9,372,364 but will 
issue task orders for each project scope/phase that has a negotiated budget with 
consultant staff assignments, hours and hourly rates. In that way, we can better manage 
the costs of the environmental review and minimize the use of both the federal grant and 
local matching funds. 

Hunters Point Shipyard - Background 

The Shipyard is divided into six parcels (parcels A through F). Generally, the Navy's 
cleanup and transfer process moves from the northernmost portions of the base to the 
southernmost, beginning with the 88-acre Parcel A. 

Designed to match the sequencing of the Navy's cleanup and conveyance process, 
negotiations with the Primary Developer, Lennar BVHP ("Lennar"), are currently 
focused on portions of the Shipyard which is anticipated to be conveyed to the City. The 
first phase of development ("Phase I") is anticipated to include those portions of parcels 
A and B that are geographically furthest away from the ongoing cleanup of adjacent 
Parcels. The development plans for Phase I include a range of uses, with an emphasis on 
residential and mixed-use development. The Agency expects to commence negotiations 
with the Developer on the next phase of development ("Phase II") in 2003. Phase II will 
likely focus on areas of the Redevelopment Plan that represent the greatest job generating 
potential: light industrial and research and development areas in Parcel D and remaining 
portions of Parcels A and B. With the bulk of the anticipated 10,000 jobs generated in 
these areas, there is a strong linkage between this Phase II and the proposed bridge. 

Local Match Sources 

Developer Contribution - To date, negotiations with the Primary Developer have 
centered primarily on the residential and mixed-use phases of development. As 
discussed above, the Agency anticipates entering into negotiations with the Lennar 
for the light industrial and research and development portions of the Shipyard in the 
upcoming year. For these uses to succeed at the Shipyard, the bridge is critical. 
Lennar's participation in the local match requirement will be part of these 
negotiations. Under the terms of Exclusive Negotiations Agreement, Lennar is 
required to fund the City and Agency's costs related to the transfer of property from 
the Navy and for costs associated with the Lennar negotiations for future 
development. To date, Lennar has funded over $4 million of the City's costs. These 
funds pay for City and Redevelopment Agency staff time and consultants. 

Grants - The Agency, working in conjunction with the City, will pursue applicable 
grants. 



14 



Attachment IV 
Memo to Finance Committee Page 3 of 5 

South Basin Bridge Project 
October 30, 2002 
Page 3 

Tax Increment - An important tool given to cities under Redevelopment Law is the 
ability to generate tax increment funds in adopted Redevelopment Project Areas. We 
expect the Navy to transfer the property to the City during the first half of 2003 and 
anticipate development to follow soon thereafter after which discretionary tax 
increment becomes a viable local match source towards the latter stages of the 
proposed environmental review and preliminary engineering process. The 
implementation plan for the Shipyard currently envisions an infusion of bond 
proceeds from issues supported by lease revenue or by tax increment during years 
three and five of the overall Shipyard project. Although the estimates are in the 
process of being revised to fit the current phasing and development concepts, the 
implementation plan indicates bond proceeds ranging from $12 to S20 million during 
the first five years of project implementation. 

Conclusion - Local Match Sources 

The reimbursement-based structure of the South Basin Bridge federal grant allows the 
City and Agency to ramp up the environmental analysis and preliminary engineering. As 
a result, the local match can be relatively small at project implementation and increase as 
more information is received and more clarity is provided in terms of project scope. This 
structure fits with the available progressive nature of the funding resources at the 
Shipyard. As the bridge project moves forward, the Agency will have increasing sources 
of revenue from which to draw the local match. If the project proceeds as envisioned, 
these sources can be significant. 

Environmental Review Phase - Cost Estimates 

Preliminary Engineering 

An EIR/EIS requires preliminary engineering of all of the alternatives to properly 
evaluate the environmental impacts as well as to develop accurate construction cost 
estimates. Such preliminary engineering can take a project design to 30% complete. 
Thus, the cost to perform these preliminary engineering studies will depend on the 
number of alternatives we will evaluate. At this time, we anticipate evaluating three 
alternatives: one short span bridge; one long span bridge; and one go around as well 
as a no build option. We could evaluate three types of bridge designs for the two 
bridge span alternatives for a possible total of six bridge alternatives that, under 
NEPA, would require the same level of engineering and analysis. 

Environmental Studies 

Paul Maltzer from City Planning Environmental Review Division, Frank Filice from 
DPW's Environmental Review Office, Mike Davis from Jones and Stolks, Rebecca 
Kohstrand from Enviro Solutions all said that this review will be very complicated 
because its in a wetland area near a contaminated area at the Bayview Hunters Point 
Shipyard. Regulatory agencies such as the Water Quality Control Board, the Army 
Corps of Engineers and the Bay and Coastal Development Commission will require 
extensive analysis of run-off and run-off control, wetland analyses, and fishing issues. 



15 



Attachment IV 

Memo to Finance Committee ^ 

South Basin Bridge Project 
October 30, 2002 
Page 4 



Consultants and Project Managers' EIR/EIS/PE Studies Cost Estimating 
Methodologies 

According to George Wong from the City Attorney's Office we can only ask 
consultants for a cost estimate for the EIR/EIS/PE if they aren't going to submit a 
proposal because it could be perceived as favoring one firm over another in the 
consultant selection process. All of the consultants that we contacted wanted to retain 
the option to submit a proposal. (Jones and Stolk, Enviro Solutions, and 
Environmental Science Associates (ESA).) However, we asked some consultants and 
project managers to provide a basis for estimating the cost of an EIR/EIS/PE study for 
this type of project. The following is a summary of those conversations. 

Mike Davis of Jones and Stolks said that the cost for an EIR/EIS/PE for this type of 
transportation project range between 6% to 10% of the total project cost depending on 
whether the analysis includes extensive engineering. The South Basin Bridge project 
is currently estimated to cost between $1 10 to $150 million. Thus, using this 
methodology, the South Basin Bridge EIR/EIS/PE could cost between $6.6 million to 
$15 million. We anticipate conducting somewhat extensive engineering to complete 
the proposed EIR/EIS/PE. Lee Saage, the Doyle Drive project manager, states that 
EIR/EIS/PE costs for transportation projects cost between 3% and 5% of the total 
construction cost depending on the level of complexity . Using this methodology, the 
South Basin Bridge EIR/EIS/PE could cost between $2.6 and $5.9 million. Rebecca 
Kohlstrand from Enviro Solutions advises that we should budget 9% to 10% for 
Preliminary Engineering and EIR/EIS/PE costs with 4% PE and 5% EIR/EIS/PE. 
Using this methodology, the cost would range from $10.8 million to $15 million. 
Peter Lee, the Metropolitan Transportation Commission's (MTC) Bridge Project 
Coordinator, states that these costs range between 5% and 7% of the total project cost 
for bridge projects. Finally, Mo Pazolki, Caltrans Project Manager for the Benicia 
Bridge project, advises that the South Basin Bridge EIR/EIS/PE could cost between 
$6.5 and $7.5 million. In summary, the estimates to conduct an EIR/EIS/PE study of 
the South Basin Bridge project provided by the various consultants and project 
managers range from a low of $2.6 million to a high of $15 million. 

Costs of Other Transportation Projects' EIR/EIS/PE Studies 

> Mid-Embarcadero Roadway - $6 million EIR/EIS/PE and $2 million detailed 
design -> final project cost = $65 million. EIR/EIS/PE as percent of total 
project = 9.2% which included extensive engineering. (12.3% for EIS/EER/PE 
and detailed design) 

> Doyle Drive Project - $8.9 million EIR/EIS/PE and approximately $36 million 
for detailed design. Final project estimated cost $300 to $700 million. 
EIR/EIS/PE as percent of total project = 1.3% to 3% (6.3% or 14.7% for 
EIR/EIS/PE and detailed design) 



16 



Attachment IV 
Memo to Finance Committee Page 5 of 5 

South Basin Bridge Project 
October 30, 2002 
Page 5 

> 4 th Street Bridge Project - $1.3M EIR/EIS/PE and $1.5M detailed design -> 
final project cost = $29 million. EIR/EIS/PE as percent of total project cost = 
4.5% (9.7% for EIR/EIS/PE and detailed design) 

> Illinois Street Bridge Project - $800,000 (EIR/EIS/PE). Final estimated project 
cost = $15M. EIR/EIS/PE as percent of total project cost = 5%. 

Conclusion 

In summary, we are confident that we will be able to fund the required local match of 
$2,343,750 with non-General Fund sources. It is unclear how much we will eventually 
need to complete the EIR/EIS/PE phase of the South Basin Bridge project since various 
environmental review and project management professionals have estimated it will cost 
between $2.6 to $15 million. However, it seems likely to be at least 5% of the projected 
total project cost or $5.5 to $7.5 million. If the environmental review phase is less than 
the estimated $1 1,718,650, we will re -program the balance of the grant to the subsequent 
project phases of detailed design and construction. We will award a consultant contract 
up to a maximum of $9,372,364 but will issue task orders for each project scope/phase 
that has a negotiated budget with consultant staff assignments, hours and hourly rates. In 
that way, we can better manage the costs of the environmental review and minimize the 
use of both the federal grant and local matching funds for this phase of the project. 



Cc: Jesse Blout, MOED 

Karin Carlson, Mayor's Office 

Harlan Kelly, DPW 

Ed Lee, DPW 

Stan Muraoka, SFRA 

Harvey Rose, Budget Analyst 



17 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

Item 2 - File 02-0994 

Note: This item was continued by the Finance Committee at its meeting of 
October 16, 2001. 



Department: 

Item: 



Public Utilities Commission (PUC) 

Resolution approving the expenditure of funds for 
emergency contract CW-336E in the amount of $441,000 
to replace variable frequency drives for main lift pumps at 
the Southeast Water Pollution Control Plant. 



Amount: 
Source of Funds: 
Description: 



$441,000 

PUC Repair and Replacement Fund. 

The proposed resolution would approve the PUC's 
expenditure of $441,000 for an emergency contract to replace 
the variable frequency drives for the main lift pumps at the 
Southeast Water Pollution Control Plant. The PUC ratified 
the declaration of the emergency on August 13, 2002 (PUC 
Resolution No. 02-0151). According to the PUC, the 
emergency declaration was required because the existing 
variable frequency drives for the four main lift pumps at the 
Southeast Water Pollution Control Plant had repeatedly 
failed. According to Mr. Jignesh Desai of the PUC, the four 
main lift pumps are the primary means of transporting 
sewage from the Bayview Hunters Point area into the plant 
for treatment. Mr. Desai advises that if the variable 
frequency drives are not replaced the failure of the drives will 
damage the main lift pumps. The PUC reports that the 
situation posed a potentially significant liability issue for the 
City if the sewer backed up. In accordance with Chapter 6, 
Article IV, Section 6.60 of the San Francisco Administrative 
Code the PUC is required to obtain Board of Supervisor 
approval for all emergency contracts that exceed $250,000. 

Mr. Desai reports that the General Manager of the PUC 
transmitted a letter to the President of the PUC 
recommending a declaration of an emergency on April 25, 
2002. The PUC conducted an expedited bid procedure as 
provided for in Section 6.60 of the Administrative Code, 
which does not require the PUC to advertise Invitations 
for Bids in a newspaper as is required under formal 
competitive bidding procedures. On May 1, 2002, 
BOARD OF SUPERVISORS 
BUDGET ANALYST 
18 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

Invitations for Bids were faxed to five contractors: (a) Bay 
Area Systems and Solutions, Inc., (b) Bleco Builders Inc., 
(c) Mayer Electric Co., Inc., (d) Millard Tong Construction 
Co., and (e) Sierra Electric Company. Attachment I, 
provided by the PUC, contains a summary of the three 
contractor bids received by the PUC. The PUC awarded 
the emergency contract for the amount of $441,000 to 
Sierra Electric Company, the low bidder, on May 7, 2002. 

Comments: 1. Mr. Desai reports that work on the emergency contract 

began on September 10, 2002 and is scheduled to be 
completed by October 31, 2002. Mr. Desai further reports 
that the PUC has paid the contractor $214,830 to date. 

2. Attachment II is a memorandum from Mr. Jon 
Loiacono of the PUC explaining why a declaration of 
emergency was recommended by the PUC General 
Manager on April 25, 2002, but the emergency was not 
ratified by the PUC until August 13, 2002 or 
approximately 3% months later. This memorandum also 
explains why this project had to be treated as an 
emergency since the work on the contract did not begin 
until September 10, 2002, or approximately 4V£ months 
after the date of April 25, 2002 when the emergency 
situation was recommended by the General Manager of 
the PUC. 

3. Section 6.60 of the Administrative Code states that: 

An "actual emergency" means a sudden, 
unforeseeable and unexpected occurrence involving 
a clear and imminent danger, demanding 
immediate action to prevent or mitigate loss of or 
damage to, life, health, property or essential public 
services. 

Although the Budget Analyst does not question the 
necessity of this project, the Budget Analyst questions 
why the $441,000 contract for this project had to be 
declared an emergency contract utilizing expedited bid 
procedures under Section 6.60 of the Administrative Code 
since the PUC ratified the declaration of an emergency on 
August 13, 2002 or more than approximately three and 
one half months subsequent to the date of April 25, 2002 
when the project was recommended as an emergency by 
BOARD OF SUPERVISORS 
BUDGET ANALYST 
19 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

the PUC General Manager. If this contract had not been 
treated as an emergency contract, the PUC would have 
been required to utilize formal competitive bidding 
procedures to award the contract, including the 
advertising of the Invitation for Bids in at least one local 
newspaper which handles the City's official advertising. 
Therefore, the Budget Analyst considers approval of the 
resolution to be a policy matter for the Board of 
Supervisors. The PUC responds in x\ttachment II 
indicating that the delay in declaring the emergency by 
the PUC was due to obtaining needed reviews by the 
Human Rights Commission and City Planning. 

4. As previously noted, the PUC has awarded an 
emergency contract to the Sierra Electric Company 
without the use of a formal competitive bidding process. 
Mr. Ted Lakey of the City Attorney's Office advises that 
the City must comply with the contract that is in place 
with the Sierra Electric Company. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

20 



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21 




Attachment I I /j^SS? 
San Francisco Public Utilities Commission 

St., 4th Floor, San Francisco, CA 941 3 • TCU (4 15) 5 5 4-3 155* Fax (4 15) 5 5 4-3 1 51 



HETCH HETCHY 

Water a power 
clean Water 



WILLIE L BROWN, JR. 
MAYOR 

ANN MOLLER CAEN 

PRESIDENT 

E. DENNIS NORMANDY 

VICE PRESIDENT 

Commissioners 
ASHOK KUMAR BHATT 
JEFFREY CHEN 
ROBERT J. COSTELLO 

PATRICIA E. MARTEL 

GENERAL MANAGER 




October 9, 2002 



Harvey M. Rose 

Budget Analyst 

1390 Market Street, Ste 1025 

San Francisco, CA 94103 

Re: Contract No. CW-336E, SEWPCP Bldg 01 1 Main Lift Pumps VFDs 

Replacement 

Dear Mr. Rose: 

In accordance with Chapter 6, Article IV, Section 6.60 of the San Francisco 
Administrative Code, the San Francisco Public Utilities Commission (SFPUC) 
requested the Board of Supervisors to approve the expenditure of funds for the 
subject contract on September 12, 2002. This letter is in response to additional 
information requested from your office. 

The General Manager of the SFPUC requested an emergency contract on April 
25, 2002. The emergency was ratified on August 13, 2002 by SFPUC Resolution 
No. 02-0151 . The reason for the time gap is because this contract required 
review and approval from HRC (Chapter 12D waiver) and City Planning 
(categorical exemption from environmental review) prior to ratification by the 
SFPUC. The General Manager has now directed staff to coordinate these 
reviews in the future with other City departments in an expeditious manner to 
avoid delays similar to this contract. 

The scope of work included purchasing and installing four variable frequency 
drives (VFDs) for sewage main lift pumps at the Southeast Water Pollution 
Control Plant (SEWPCP). The construction could not start until September 2002, 
because VFDs fabrication and delivery had a lead-time of twenty (20) weeks. 
VFDs were ordered on the May 7, 2002 by the Contractor upon the receipt of 
Notice to Proceed from SFPUC. VFDs were delivered to the SEWPCP on 
September 5, 2002. The construction commenced on September 10, 2002. 

If you have further questions regarding this project, please contact me at 242- 
2228. 



Sincerely, 




on Loiacono, Manager 
Environmental Engineering, WPC 



22 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

Item 3 - File 02-1667 

Note: This item was continued by the Finance Committee at its meeting of 
October 16, 2002. 

Department: Controller 

Item: Resolution establishing the City and County's Appropriations 

Limit for FY 2002-2003 pursuant to Article XIII B of the 
California Constitution. 

Description: The proposed resolution would establish $1,751,554,849 as 

the FY 2002-2003 adjusted Appropriations Limit for the City 
and County of San Francisco as required by Article XIII B of 
the California Constitution. 

On November 6, 1979, California voters approved Proposition 
4, known as the Gann Initiative, which added Article XIII B 
to the California Constitution. Article XIII B limits the 
growth of appropriations from the proceeds of taxes of the 
State of California and local governments to the percentage 
change in population for the local governmental entity and 
the percentage change in the cost of living. The California 
Government Code requires that each local government 
establish its Appropriations Limit by resolution each year. 

State Proposition 111, approved by the voters in June 1990, 
made several changes to Article XIII B (9) which are reflected 
in the City's computations. First, Proposition 111 redefined 
change in the cost of living as follows: 

"Change in the cost of living" for an entity of local 
government, other than a school district or a community 
college district, shall be either (A) the percentage change in 
California per capita personal income from the preceding 
year, or (B) the percentage change in the local assessment 
roll from the preceding year for the jurisdiction due to the 
addition of local nonresidential new construction. Each 
entity of local government shall select its change in the cost 
of living pursuant to this paragraph annually by a 
recorded vote of the entity's governing body. 

According to the State Department of Finance, the 
percentage change in California per capita personal income 
as of January of 2002 as compared to January of 2001 results 
in a 1.27 percent decrease. The Assessor's Office advises that 
the percentage change in the local assessment roll from the 
preceding year for the jurisdiction due to the addition of local 

Board of Supervisors 

Budget Analyst 
23 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



nonresidential new construction is 0.68 percent for FY 2002- 
2003 compared to FY 2001-2002. The proposed resolution 
specifies that the Appropriations Limit calculations pursuant 
to Article XIII B shall use the percentage change in the local 
assessment role due to non-residential new construction from 
the previous year as the measure of "change in the cost of 
living", rather than the percentage change from the 
preceding year in per capita income because the use of the 
change in per capita income would have resulted in a lower 
Appropriations Limit calculation. 

Article XIII B permits an exclusion from appropriations 
subject to limitation for Voter- Approved indebtedness funded 
from the proceeds of taxes. Such Voter-Approved 
indebtedness funded from the proceeds of taxes for FY 2002- 
2003 totals $88,162,072 according to the Controller. 

Article XIII B as amended by Proposition 111 also states that 
appropriations subject to limitation do not include 
"appropriations required to comply with mandates of the 
Courts or the Federal Government". In that regard, the 
Controller has identified that, for FY 2002-2003, $3,857,143 
will be expended by City departments for costs related to 
toxic remediation required by the Federal Resource 
Conservation Act. 

Article XIII B (9), as amended by Proposition 111, also 
permits an adjustment to exclude appropriations for 
"Qualified Capital Outlay as defined by the legislature" from 
proceeds of taxes. This results in a reduction of $15,844,155 
for FY 2002-2003, from appropriations of proceeds of taxes 
subject to the limit for Capital Outlay. 

The Controller has computed the FY 2002-2003 
Appropriations Limit for the City and County of San 
Francisco as shown on the following page (percentages and 
computed amount have been rounded by the Controller): 



Board of Supervisors 

Budget Analyst 

24 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



FY 2001-2002 Gross Appropriations Limit $1,717,059,535 

Adjusted by : 

Increase in Cost of Living 0.68% 

Increase in Population 1.32% 

FY 2002-2003 Net Appropriations Limit $1,751,554,849* 

*1.0068 times 1.0132 equals 1.020090 times $1,717,059,535. 

The Controller's Office monitors revenues subject to the 
Appropriations Limit throughout each fiscal year. At year-end, 
as part of the annual financial audit, a final computation is 
prepared comparing actual proceeds of taxes to the 
Appropriations Limit. At that time, two tests must be met. 
First, all actual proceeds of taxes must be below the 
Appropriations Limit; and second, all actual proceeds of taxes 
collected must be appropriated. If either test is not met, 
according to Article XIII B, excess revenues collected must be 
returned to the taxpayers within two years. 

As calculated by the Controller, the amount appropriated in 
the City's FY 2002-2003 budget that is subject to the 
Appropriations Limit is $1,544,346,831 which is $207,208,018 
less than the net FY 2002-2003 Appropriations Limit of 
$1,751,554,849. In accordance with the Administrative 
Provisions of the Annual Appropriation Ordinance, any FY 
2002-2003 tax proceeds in excess of current estimates will be 
appropriated to the City's General Fund General Reserve, 
which is used as a revenue source (a) to fund supplemental 
appropriations during the current fiscal year, and (b) to fund 
the City's budget for the next fiscal year. 



Recommendation: Approve the proposed resolution. 



Board of Supervisors 
Budget Analyst 

25 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



Item 4 - File 02-1671 

Department: 

Item: 

Amount: 
Source of Funds: 

Description: 



Comments: 



Board of Supervisors 

Hearing to consider the release of reserved funds in the 
amount of $318,000 for official advertising. 

$318,000 

General Fund monies reserved in the FY 2002-2003 
Board of Supervisors budget. 

The Board of Supervisors appropriated $480,000 in the 
Board of Supervisors FY 2002-2003 budget for official 
advertising, placing $318,200 on reserve. This reserve 
was established pending submission to the Finance 
Committee of the Controller's Audits Division assessment 
of the procedures used by the firm Verified Audit 
Circulation in conducting the newspaper circulation audit 
of the San Francisco Independent, the City's official 
newspaper for Type 2 official advertising. Type 2 official 
advertising must be published one time (other than one- 
time advertising related to special meetings for the Board 
of Supervisors and its standing and/or special committees) 
or more than one time but not more than three times per 
week for a specified number of weeks. The official 
newspaper must publish at least three days in a calendar 
week for Type 2 official advertising. Such days do not 
need to be consecutive days. 

The Attachment is a memorandum from the Controller's 
Audits Division containing the results of the Controller's 
Audits Division assessment of the circulation audit of the 
San Francisco Independent conducted by Verified Audit 
Circulation. As stated in the Attachment, "Based on the 
procedures described by the president of Verified Audit, 
we are reasonably assured that the City can rely on the 
audited circulation data for the San Francisco 
Independent." 

1. On June 24, 2002, the Board of Supervisors approved a 
resolution designating the San Francisco Independent to 
be the City's official newspaper for Type 2 non-consecutive 



Board of Supervisors 
Budget Analyst 

26 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



day official advertising for the period of July 1, 2002 
through December 31, 2002 (File 02-0778). 

According to Mr. Ted Lakey of the City Attorney's Office, 
the Board of Supervisors will need to designate an official 
newspaper for Type 2 non-consecutive day official 
advertising for the period of January 1, 2003 through 
June 30, 2003. Mr. Mike Ward of the Purchasing Division 
reports that the City's current six-month contract with 
the San Francisco Independent contains an option to 
extend the contract for an additional six months for the 
period from January 1, 2003 through June 30, 2003. Mr. 
Ward advises that the Purchasing Division intends to 
introduce legislation to the Board of Supervisors 
designating the San Francisco Independent as the City's 
official newspaper for Type 2 non-consecutive day 
advertising for the period from January 1, 2003 through 
June 30, 2003. 

2. Mr. Lakey advises that the Board of Supervisors also 
needs to designate an official newspaper for Type 1 official 
advertising for FY 2002-2003. Type 1 official advertising 
must be published on two or more consecutive days, and 
all official advertising which is required to be published in 
accordance with 2.103 and 2.108 of the Charter for special 
meetings of the Board of Supervisors and its standing or 
special committees. The official newspaper must publish 
at least five consecutive days a week for Type 1 official 
advertising. Mr. Ward reports that the City has extended 
its FY 2001-2002 contract with the San Francisco 
Chronicle on a month-to-month basis to provide Type 1 
official advertising in FY 2002-2003. However, the Board 
of Supervisors has not yet designated an official 
newspaper for Tj^pe 1 official advertising for FY 2002- 
2003. 

3. According to Mr. Lakey, without designation by the 
Board of Supervisors of an official newspaper for Type 1 
and Type 2 official advertising, the City is not obligated to 
publish official advertisements in any particular 
newspaper. 

4. According to Mr. Ward, the cost of the City's six-month 
contract from July 1, 2002 through December 31, 2002 

Board of Supervisors 

Budget Analyst 

27 



Memo to Finance Committee 

xxxx, 2002 Finance Committee Meeting 

with the San Francisco Independent for Type 2 official 
advertising is based on the cost per line of typeset. Mr. 
Ward reports that the cost per line of typeset charged by 
the San Francisco Independent is $3.98, which is the 
same per line typeset rate charged to the City by the San 
Francisco Independent in FY 2001-2002. Mr. Ward 
further reports that the cost of the City's month-to-month 
contract with the San Francisco Chronicle for Type 1 
official advertising is also based on the cost per line of 
typeset. Mr. Ward reports that the cost per line of typeset 
charged by the San Francisco Chronicle is $8.85, which is 
5.1 percent more than the per line typeset rate of $8.42 
charged to the City by the San Francisco Chronicle in FY 
2001-2002. 

5. As previously noted, the Board of Supervisors 
appropriated $480,000 in the Board of Supervisors FY 
2002-2003 budget for official advertising, including 
$469,131 for Type 1 official advertising and $10,869 for 
Type 2 official advertising. According to Ms. Gloria Young, 
Clerk of the Board of Supervisors, it is now anticipated 
that a total of $450,000 will be expended on official 
advertising in FY 2002-2003. Therefore, the Budget 
Analyst recommends releasing $288,200 of the requested 
$318,000 of reserved funds, or $29,800 less than the 
amount requested to be released ($480,000 appropriated 
less $318,200 reserved equals $161,800 plus $288,200 
recommended amount for release equals $450,000 
needed). 

Recommendation: In accordance with Comment No. 5, reduce the requested 

amount of reserved funds to be released by $29,800 from 
$318,000 to $288,200 and approve the release of $288,200. 



Board of Supervisors 

Budget Analyst 

28 



iflmpl. grrY amp county of san francisco 



Attachment 



OFFICE OF THE (JONIROLLER 



MEMORANDUM 

TO: Ed Harrington 

FROM: Nori Hirasuna and Winnie Woo 

DATE: September 1 6, 2002 

SUBJECT: Circulation Audit of the San Francisco independent Newspaper 



The firm that conducts the circulation audit of the San Francisco Independent 
(Independent) has reasonable audit procedures to substantiate the circulation data for the 
Independent. We interviewed the president of the firm, Verified Audit Circulation 
(Verified Audit), as well as the vice president of sales for the San Francisco Examiner and 
the Independent, on September 5, 2002. Verified Audit has been in business for more than 
50 years and audits more than 1,500 publications throughout the United States, Canada; 
and Latin America. It has audited such newspaper clients as the Chicago Tribune, Cox 
Newspapers, Knight Ridder, The McClatchy Company, and the Washington Post. 

Verified Audit's procedures require the Independent to submit quarterly data on 
circulation, such as number of copies printed each day, the number of copies delivered by 
carriers, mailing statements for newspapers sent by mail, and the number of copies that are 
placed in newspaper racks. Once a year, Verified Audit makes a site visit to conduct its 
audit, and randomly selects for testing, one week in each of four months. Verified Audit 
confirms the number of issues printed and distributed by examining printing press logs that 
show the starting and ending numbers for copies printed on the printing presses for each 
run. Since the Independent is a free newspaper, there is no subscriber base to check, but 
Verified Audit does review carrier information to verify that carriers were being paid to 
deliver newspapers to households in San Francisco. According to the San Francisco 
Examiner's vice president of sales, a district manager checks to make sure that the carriers 
deliver the newspapers to households and just doesn't dump the papers at a comer. He 
further explained that delivery to a specific household may change from week to week. 
The Independent delivers to a set number of households in a specific zip code, but it 
doesn't necessarily deliver to a specific household. As a'further test to verify circulation, 
Verified Audit also conducts polls every two to three years to ask a sample of San 
Francisco residents whether they normally receive the Independent. In its audit report for 
calendar year 2001, Verified Audit reported that 99% of its sample reported receiving the 
Independent. 

Based on the procedures described by the president of Verified Audit, we are reasonably 
assured that the City can rely on the audited circulation data for the San Francisco 
Independent. 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

Item 5 - File 02-1773 



Departments: 



Port 

Public Works 



Item: 



Amounts and 
Sources of Funds: 



Grant Period: 



Required Match: 



Source of Matching 
Funds: 



Indirect Costs: 



Description: 



Resolution authorizing the San Francisco Port 
Commission to accept and expend four grants in the total 
amount of $1,000,000 from the (a) State of California 
Coastal Conservancy, (b) the Association of Bay Area 
Governments (ABAG), (c) the State of California 
Transportation Commission, and (d) the State of 
California Wildlife Conservation Board for the Port's 
Ferry Terminal Public Pier Project. 



Association of Bay Area Governments San 

Francisco Bay Trail Project: 
State of California Coastal Conservancy: 
State of California Transportation 

Commission, Environmental Enhancement 

and Mitigation Program 

(See Comment No. 8): 
State of California Wildlife Conservation 
Board: 

Total Grant Amount: $1,000,000 



$200,000 
400,000 



200,000 



200,000 



July 1, 2002 through December 31, 2003 (18 Months, see 
Comment No. 1). 

$300,000 (20.6 percent of the total project cost of 
$1,456,686, see Comment No. 2) 



Port's Fiscal Year 
Comment No. 2) 



1999-2000 Capital Budget (See 



The Port requests that indirect costs be waived to 
maximize the use of the available grant funds for direct 
services. (See Comment No. 6) 

The proposed resolution would authorize the Port to 
accept and expend four grants totalling $1,000,000 to 
fund construction of a public pier project near the Ferry 
Terminal along the Embarcadero. The $1,000,000 in 
subject grant funds is comprised of the following: (a) 
$400,000 from the State of California Coastal 

Board of Supervisors 
Budget Analyst 
30 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

Conservancy; (b) $200,000 from the State of California 
Transportation Commission, Environmental 

Enhancement and Mitigation Program; (c) $200,000 from 
the State of California Wildlife Conservation Board grant; 
and (d) $200,000 from the Association of Bay Area 
Governments San Francisco Bay Trail Project. 

According to Mr. Dan Hodapp of the Port, the proposed 
project would utilize the existing breakwater near the 
Ferry Terminal Building, which is an offshore wall that 
protects the shore from the force of waves. A pier would be 
constructed with public pedestrian improvements directly 
on top of the breakwater. The project would include (a) 
construction of an approximately 115-foot connection from 
Herb Caen Way (The Embarcadero) between Mission 
Street and Howard Street on top of the existing 
breakwater, and (b) construction of a 15-foot wide public 
pier with a circular turn-around station at the end of the 
pier, which would extend approximately 600 feet into the 
Bay. 

According to Mr. Hodapp, the proposed project has 
received all necessary regulatory approvals from the Bay 
Conservation and Development Commission (BCDC), the 
Army Corps of Engineers, the Regional Water Quality 
Control Board, the San Francisco Planning Department, 
and the Federal Highway Administration. According to 
Mr. Hodapp, the design component of the project was 
completed as part of the Port's Ferry Terminal Public Pier 
Project and the proposed grant monies would fund 
construction costs and related contractual services costs. 
Mr. Hodapp advises that the proposed Ferry Terminal 
Public Pier Project would provide recreation and 
recreational fishing opportunities to the public. 

Budget: A summary budget for the proposed Ferry Terminal 

Public Pier Project and the related funding sources are as 
follows: 



Board of Supervisors 
Budget Analyst 

31 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



Proposed Project Funding Sources 

Subject Grant Monies $1,000,000 

Port Matching Funds 300,000 

Metropolitan Transportation 

Commission Transportation 

Development Act Article 3 

Grant Funds $50,000 

California Resources Agency 

Grant Funds 106.686 156.686 * 

Total Funding $1,456,686 

* See Comment Nos. 2, 3 and 4. 

Proposed Project Summary 

Construction $1,340,186 

Construction Management Services 116.500 

Total Project Expenditures $1,456,686 

Attachment I, provided by Mr. Hodapp, contains budget 
details for the total estimated project costs of $1,445,686 
and related funding sources. 

Comments: 1. Although the subject grant period began on July 1, 

2002, Mr. Hodapp reports that the proposed resolution is 
coming before the Board of Supervisors only now, nearly 
four months after the subject grant was to begin, because 
the Port has been assembling the Invitation for Bid 
package to obtain a construction contractor for the 
proposed project. Mr. Hodapp advises that the 
Department has neither accepted nor expended the 
proposed grant funds. Therefore, this resolution does not 
provide for retroactivity. Mr. Hodapp further advises the 
Port plans to expend the entire grant amount prior to 
December 31, 2003, the end of the grant period. 

2. As noted above, the subject grants require a total local 
match of $300,000, or 20.6 percent of the total project cost 
of $1,456,686. According to Mr. Hodapp, the local match is 
comprised of (a) $120,000 in Port revenues to match the 
State of California Coastal Conservancy grant; (b) 
$60,000 in Port revenues to match the State of California 
Transportation Commission, Environmental Enhancement 
and Mitigation Program grant; (c) $60,000 in Port revenues 
to match the State of California Wildlife Conservation 

Board of Supervisors 
Budget Analyst 

32 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



Board grant; and (d) §60,000 in Port revenues to match 
the Association of Bay Area Governments San Francisco 
Bay Trail Project grant funds. The subject grant funds of 
$1,000,000 and the required matching funds of $300,000 
total $1,300,000. According to Mr. Hodapp, the local 
match of $300,000 will be funded from the Fiscal Year 
1999-2000 Port Capital Budget, as previously 
appropriated by the Board of Supervisors. According to 
Mr. Hodapp, the $300,000 in matching funds was carried 
over from Fiscal Year 1999-2000, while the Port was in 
the process of procuring the subject proposed grant funds. 
The balance of $156,686 (total project costs of $1,456,686 
less subject grant funds of $1,000,000 less the required 
match of $300,000) would be funded from the sources 
cited in Comment No. 3 below. 

3. Mr. Hodapp advises that the Metropolitan 
Transportation Commission will fund $50,000 of the 
proposed project through the Department of Public 
Works. According to Mr. Patrick Rivera of the 
Department of Public Works, the $50,000 of funds are 
from the Metropolitan Transportation Commission 
Transportation Development Act (TDA) Article 3 grant 
funds, which was approved by the Board of Supervisors in 
June of 2002. 

4. According to Mr. Hodapp, the remaining $106,686 in 
funding for the proposed project is from State of 
California Resources Agency - Coastal Impact Assistance 
Program (CLAP) grant. According to Mr. Hodapp, the Port 
has been awarded and accepted this grant. Mr. Hodapp 
further advises that the Port anticipates bringing the 
$106,686 CLAP grant before the Board of Supervisors in 
November of 2002. 

5. As shown in Attachment I, the estimated construction 
costs are $1,340,186. Mr. Hodapp reports that a contract 
will be awarded to a construction contractor on the basis 
of the lowest, qualified competitive bid. Mr. Hodapp 
advises that the Port plans to conduct the competitive bid 
process in December of 2002 for the construction of the 
proposed Ferry Terminal Public Pier Project. 

6. According to Mr. Hodapp, the $116,500 reported in the 
Grant Information Form for each of the subject grants as 

Board of Supervisors 
Budget Analyst 

33 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

indirect costs is actually Port overhead costs, and not 
indirect costs as indicated. According to Mr. Hodapp, the 
$116,500 would be used for construction management 
services for the proposed project. Such construction 
management services will be performed by an outside 
consultant. Mr. Hodapp advises that in January of 2003 
the Port plans to conduct a Request for Proposal process 
for such construction management services, which is 
estimated to cost $116,500. However, since a consultant 
has not yet been selected, the Budget Analyst 
recommends that the $116,500 be placed on reserve, 
pending identification of the consultant and submission to 
the Finance Committee of total costs including estimated 
hours and hourly rates. 

7. As a condition of the $200,000 subject grant from the 
State of California Wildlife Conservation Board, the State 
of California requires the Port to enter into a proposed 
25-year Operating Agreement and Standard Agreement 
with the State of California. According to Mr. Tim 
Yoshida of the City Attorney's Office, the proposed 
Operating Agreement and Standard Agreement is not 
subject to separate Board of Supervisors approval because 
that agreement is simply a condition to satisfy the 
operating intent of the grant agreement, which is before 
the Board of Supervisors. According to Mr. Hodapp, the 
proposed Operating Agreement and Standard Agreement 
(a) places conditions on the use of the proposed pier, 
including that the Port may not impose charges for the 
use of the pier, (b) establishes concession restrictions on 
the proposed pier, requiring that the concessions are 
consistent with the use of the pier, and (c) requires that 
the pier signs must display the names of State agencies 
involved in the project. Although, the Port may enter into 
agreements with third parties for operation of concessions 
on the proposed pier, with State of California approval, 
and under the Operating Agreement and Standard 
Agreement, any revenues from concessions must be used 
solely for the operation and maintenance of the proposed 
pier, according to Mr. Hodapp, the Port does not plan to 
locate concessions on the proposed pier. 

8. Attachment II is the Grant Information Form, provided 
by the Port, which includes the Disability Access 
Checklist. The Grant Information Form incorrectly 

Board of Supervisors 

Budget Analyst 

34 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

identifies one of the sources of grant funding as the State 
of California Resources Agency. Mr. Hodapp states the 
correct source of grant funding is the State of California 
Transportation Commission, Environmental and 
Mitigation Program. 

Recommendations: 1. In accordance with Comment No. 6, amend the 

proposed resolution by reserving $116,500 for the 
construction management services consultant, pending 
identification of the consultant and submission to the 
Finance Committee of budget details, including estimated 
hours and hourly rates. 

2. Approve the proposed resolution, as amended. 



Board of Supervisors 
Budget Analyst 

35 



Attachment I 



i 



i 



Ferrv Terminal Public Pier Project 
BUDGET DETAIL 



Public Pier - Line Item Expenses: 






Description 


Amount 




Trestle to Connect to Promenade 


5480,000 




Railing and site furnishings 


510,000 




Electrical 


65,000 




Pier Turn-around 


110.000 




Public Pier (Subtotal) 




51,165,000 


Escalation @ 3.5% 


46,600 




Contingency @ 9.6% 


128.586 




Construction / Contractual Services 




51,340,186 


Construction Administration @10% 


116.500 




PUBLIC PIER (TOTAL) 




51.456.686 



Public Pier - Sources of Funds: 




Description 


Source of Funds 
5400,000 


California Coastal Conserv ancy Grant Funds 


California Transportation Commission Grant Funds 


200,000 


Association of Bay Area Governments Grant Funds 


200,000 


Wildlife Conservation Board Grant Funds 


200,000 


Port Capital Matching Funds 


300,000 


Metropolitan Transportation Commission 




Article 3 Grant Funds 


50,000 


California Resources Agency - CLAP Grant 


106.686 


Total Funds: 


31,456,686 



36 



File Number: 

(Provided by Clerk of Board of Supervisors) Attachment II 

Page 1 of 8 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1. Grant Title: Association of Bay Area Governments Bay Trail program to allow construction of the 
Downtown Ferry Terminal Public Pier Project 

2. Department: Port of San Francisco 

3. Contact Person: Taline Sanassarian Telephone: 415-274-0417 

4. Grant Approval Status (check one): 

PC ] Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $200,000 

6a. Matching Funds Required: $60,000 
b. Source(s) of matching funds (if applicable): Port of San Francisco 

7a. Grant Source Agency: Association of Bay Area Governments (ABAG) Bay Trail Project 
b. Grant Pass-Through Agency (if applicable): None 

8. Proposed Grant Project Summary: 

The Downtown Ferry Terminal Public Pier would take advantage of a unique opportunity- transforming 
an existing, required breakwater into a landmark open space and recreation pier extending 600 feet 
into San Francisco Bay. The Public Pier would be an extension of the regional Bay Trail, and a key 
addition to the Port's open space network. The project enjoys broad community support, and is 
consistent with local, regional, and statewide plans and policies. Additionally, the Downtown Ferry 
Terminal Public Pier is designed, permitted, approved, and ready for construction. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: July 2002 End-Date: December 2003 

10. Number of new positions created and funded: None 

11. If new positions are created, explain the disposition of employees once the grant ends? N/A 

12a. Amount budgeted for contractual services:1,328,100 



37 



c. If so, will contract services help to further the goals of the department's MBE/WBE Attachment 1 1 

requirements? Yes Page 2 of 8 . 

d. Is this likely to tfe a one-time or ongoing request for contracting out? One-time 

13a. Does the budget include indirect costs? [X]Yes []No 

b1 . If yes, how much? $1 1 6,500 

b2. How was the amount calculated? Port construction administration costs at 10% of construction 
cost. 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [ ] To maximize use of grant funds on direct services 

[ j Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[ ] Existing Site(s) [X ] Existing Structure(s) [ ] Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ X] New Program(s) or Service(s) 

[X ] New Site(s) [ X] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer: fjJr. I . kmcw , Mfl£ 

1 (Name) 

Date Reviewed: 2'/ j^p IfrTl- 

Department Approval: VoU&i Wof^l £*gtxrTlVS PlREcTcR, 

(Title) 




38 



File Number: 

(Provided by Clerk of Board of Supervisors) Attachment 1 1 

Page J of 8 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: California Coastal Conservancy program to allow construction of the Downtown Ferry 
Terminal Public Pier Project 

2. Department: Port of San Francisco 

3. Contact Person: Taline Sanassarian Telephone: 415-274-0417 

4. Grant Approval Status (check one): 

[X] Approved by funding agency [] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $400,000 

6a. Matching Funds Required: $120,000 
b. Source(s) of matching funds (if applicable): Port of San Francisco 

7a. Grant Source Agency: California Coastal Conservancy 

b. Grant Pass-Through Agency (if applicable): None 

8. Proposed Grant Project Summary: 

The Downtown Ferry Terminal Public Pier would take advantage of a unique opportunity- transforming 
an existing, required breakwater into a landmark open space and recreation pier extending 600 feet 
into San Francisco Bay. The Public Pier would be an extension of the regional Bay Trail, and a key 
addition to the Port's open space network. The project enjoys broad community support, and is 
consistent with local, regional, and statewide plans and policies. Additionally, the Downtown Ferry 
Terminal Public Pier is designed, permitted, approved, and ready for construction. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: July 2002 End-Date: December 2003 

10. Number of new positions created and funded: None 

1 1 . If new positions are created, explain the disposition of employees once the grant ends? N/A 

12a. Amount budgeted for contractual services:1,328,100 



39 



c. If so, will contract services help to further the goals of the department's MBE/W BE Attachment II 

requirements? Yes Page 4 of 8 — ■ 

d. Is this likely to be a one-time or ongoing request for contracting out? One-time 

13a. Does the budget include indirect costs? [X ] Yes [ ] No 

b1 . If yes, how much? $1 1 6,500 

b2. How was the amount calculated? Port construction administration costs at 10% of construction 
cost. 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [ ] To maximize use of grant funds on direct services 

[ ] Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[ ] Existing Site(s) [X ] Existing Structure(s) [ ] Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ X] New Program(s) or Service(s) 

[X ] New Site(s) [ X] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer: fJJr. I , jWcuy*_ L jH^ 

' (Name) 

Date Reviewed: I'-l ^a 7&TI- 

Department Approval: VoU£{ WoN6r[ &r£qjX\\lfr PlREcTc^ 

(Name) (Title) 



(Signature) ' /! 



40 



File Number: 

(Provided by Clerk of Board of Supervisors) ... , . j T 

Page b of 8 
Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant 'funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: California Department of Transportation Environmental Enhancement & Mitigation (EEM) 
program to allow construction of the Downtown Ferry Terminal Public Pier Project 

2. Department: Port of San Francisco 

3. Contact Person: Taline Sanassarian Telephone: 415-274-0417 

4. Grant Approval Status (check one): 

DC] Approved by funding agency [] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $200,000 

Sa. Matching Funds Required: $60,000 
b. Source(s) of matching funds (if applicable): Port of San Francisco 

7a. Grant Source Agency: State of California Resources Agency 
b. Grant Pass-Through Agency (if applicable): None 

8. Proposed Grant Project Summary: 

The Downtown Ferry Terminal Public Pier would take advantage of a unique opportunity- transforming 
an existing, required breakwater into a landmark open space and recreation pier extending 600 feet 
into San Francisco Bay. The Public Pier would be an extension of the regional Bay Trail, and a key 
addition to the Port's open space network. The project enjoys broad community support, and is 
consistent with local, regional,, and statewide plans and policies. Additionally, the Downtown Ferry 
Terminal Public Pier is designed, permitted, approved, and ready for construction. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: July 2002 End-Date: December 2003 

1 0. Number of new positions created and funded: None 

1 1 . If new positions are created, explain the disposition of employees once the grant ends? N/A 

12a. Amount budgeted for contractual services:1,328,100 



41 



c. If so, will contract services help to further the goals of the department's MBE/WBE Attachment II 

requirements? Yes Pag e E of 8 • 

d. Is this likely to be a one-time or ongoing request for contracting out? One-time 

1 3a. Does the budget include indirect costs? [X ] Yes [ ] No 

b1 . If yes, how much? $1 16,500 

b2. How was the amount calculated? Port construction administration costs at 10% of construction 
cost. 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [ ] To maximize use of grant funds on direct services 

[ ] Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[ ] Existing Site(s) [X ] Existing Structure(s) [ ] Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ X] New Program(s) or Service(s) 

[X ] New Site(s) [ X] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer: f'Jjr.l . jWtjW , ftjQQ 

1 (Name) 

Date Reviewed: 2'/ ^a 1&~l~ 

Department Approval: PoU& WoMfcH £*ggJTlVfs PlREcTc^ 

(Name) (Title) 



(Signature) / 




42 



File Number: 

(Provided by Clerk of Board of Supervisors) Attachment II 

Page / of 8 
Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1. Grant Title: California Department of Fish & Game Wildlife Conservation Board program to allow 
construction of the Downtown Ferry Terminal Public Pier Project 

2. Department: Port of San Francisco 

3. Contact Person: Taline Sanassarian Telephone: 415-274-0417 

4. Grant Approval Status (check one): 

[X] Approved by funding agency [] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $200,000 

6a. Matching Funds Required: $60,000 
b. Source(s) of matching funds (if applicable): Port of San Francisco 

7a. Grant Source Agency: Wildlife Conservation Board, Department of Fish & Game 

b. Grant Pass-Through Agency (if applicable): None 

8. Proposed Grant Project Summary: 

The Downtown Ferry Terminal Public Pier would take advantage of a unique opportunity- transforming 
an existing, required breakwater into a landmark open space and recreation pier extending 600 feet 
into San Francisco Bay. The Public Pier would be an extension of the regional Bay Trail, and a key 
addition to the Port's open space network. The project enjoys broad community support, and is 
consistent with local, regional, and statewide plans and policies. Additionally, the Downtown Ferry 
Terminal Public Pier is designed, permitted, approved, and ready for construction. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: July 2002 End-Date: December 2003 

10. Number of new positions created and funded: None 

11. If new positions are created, explain the disposition of employees once the grant ends? N/A 

12a. Amount budgeted for contractual services:1,328,100 



43 



c. If so, will contract services help to further the goals of the department's MBE/WBE Attachment II 

requirements? Yes Page 8 of 8 • 

d. Is this likely to be a one-time or ongoing request for contracting out? One-time 

13a. Does the budget include indirect costs? [X ] Yes [ ] No 

b1. If yes, how much? $116,500 

b2. How was the amount calculated? Port construction administration costs at 10% of construction 
cost. 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [ ] To maximize use of grant funds on direct services 

[ ] Other (please explain): 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[ ] Existing Site(s) [X ] Existing Structure(s) [ ] Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ ] Rehabilitated Structure(s) [ X] New Program(s) or Service(s) 

[X ] New Site(s) [ X] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance "with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer: {JjrA . j^rtcu^ | M^-0 

1 (Name) 

Date Reviewed: 2'/ j-*a "2# r ^-- 

Department Approval: VoUfr Wof^q £*ga/TIV'& PlREcTc^ 

(Name) (Title) 

Q/ : 

(Signature) // 



44 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



Item 6 -File 02-1774 

Department: 

Item: 



Amount: 
Grant Period: 

Source of Funds: 

Required Match: 
Indirect Costs: 

Description: 



Port 



Resolution authorizing the San Francisco Port 
Commission to accept and expend a Federal grant in the 
amount of $500,000 from the Federal Transportation 
Security Administration to fund the Port's security 
assessment efforts. 

$500,000 

February 1, 2003 to May 31, 2003 (Four months, see 
Comment No. 3) 

United States Department of Transportation, 
Transportation Security Administration — Port Security 
Grants Program 

$100,000 (See Comment No. 1) 

The proposed resolution does not include indirect costs in 
the grant budget in order to maximize the use of available 
funds on direct services. 

The proposed resolution would authorize the Port to 
accept and expend Federal grant funds of S500,000 for the 
purpose of assessing the security needs of waterfront 
properties managed by the Port. 

The grant funds would be used to contract with a 
consultant who would conduct a comprehensive security 
assessment of the Port's facilities and operations, and 
evaluate and identify areas of security vulnerability and 
appropriate security mitigation strategies, in a five-phase 
process, as follows: 

• Phase l --the consultant would conduct interviews with 
Port tenants and other stakeholders, visit sites and 
collect security-related data. 

• Phase 2 --the consultant would issue interim and 
comprehensive final reports and present findings to 
the Port. 

• Phase 3 --the consultant would identify and prioritize 
capital projects needed for security purposes. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

45 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

• Phase 4 --the consultant would identify and implement 
pilot projects to evaluate the effectiveness of selected 
capital projects before full-scale implementation is 
begun. 

• Phase 5 --the consultant would provide training to Port 
staff and Port tenants in order to promote security- 
focused procedures for activities conducted on Port 
facilities. 

Budget: The total project budget of $600,224, including the subject 

grant funds and the matching funds of $100,224, is shown 
in Attachment I. 

Comments: 1. According to Mr. Michael Nerney of the San Francisco 

Port, the $100,000 matching fund requirement will be met 
by $100,224 of in kind contributions from existing Port 
staff time dedicated to grant-related work, as detailed in 
Attachment I. In contrast to the consultant 

responsibility, the Port staff providing the in kind 
contribution will prepare and issue the Request for 
Proposal, evaluate and select a consultant and, upon 
selection of a consultant, manage and coordinate the 
consultant contract, according to Mr. Nerney. 

2. Mr. Nerney reports that a Request for Proposal (RFP) 
has been issued by the Port in order to select a consultant 
that will evaluate and assess the security needs of the 
Port. The RFP was emailed to the 35 consultants listed in 
Attachment II, provided by Mr. Nerney. According to Mr. 
Nerney, the Port also advertised the RFP availability in 
the following minority newspapers: China Press, Chinese 
Times and Asian Week (Chinese Community); El 
Mensajero, El Latino and El Reportero (Hispanic 
Community); Bay View, Inc. (African American 
community); and Bay Area Reporter 

(lesbian/gay/bisexual/transgender community). Mr. 

Nerney states that the Port also sent notice of the RFP to 
the American Association of Port Authorities for 
placement in its weekly newsletter. Mr. Nerney further 
states that the Office of Contract Administration has 
listed the RFP on its Purchasing Division's website. Mr. 
Nerney advises that the Port anticipates selecting a 
consultant under the subject grant by December 20, 2002. 
The Budget Analyst therefore recommends that the 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

46 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

$500,000 in grant funds be reserved pending submission 
to the Finance Committee of the identification of the 
consultant and provision of budget details, including 
consultant hours and hourly rates. 

3. Attachment III, provided by the Port, is the Grant 
Information Form, which includes the Disability Access 
Checklist. The Grant Information Form states that the 
start date of the grant period is January of 2003. Mr. 
Nerney, however, advises that the Port has revised the 
start date to February 1, 2003 since the Port Commission 
will not be able to review and approve the final consultant 
selection until its Commission meeting in January, 2003. 
Mr. Nerney further advises that the end date of the grant 
period, stated to be April of 2003 in the Grant Information 
Form, will also be delayed one month, to May 31, 2003. 

Recommendation: 1. In accordance with Comment No. 2, amend the 

proposed resolution by reserving this $500,000 grant, 
pending selection of a consultant and submission to the 
Finance Committee of budget details, including estimated 
hours and hourly rates. 

2. Approve the proposed resolution, as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

47 



Attachment I 
Page 1 of 3 



Security Assessment Budget 



Contractual Services (Phases 1-5) 

Phase 1 - Research 

• Collect data 

• Conduct interviews 

• Visit sites 

Phase 2 - Reporting 

• Issue interim reports based on research 

• Issue comprehensive final report 

• Present findings & recommendations to Port 

Phase 3 - Capital Projects 

• Identify and prioritize capital projects 

• Estimate project costs 

• Outline projects in grant-proposal format 

Phase 4 - Pilot Projects 

• Identify and implement pilot projects 

Phase 5 -Training 

• Develop port-related security curriculum 

• Train Port staff & stakeholders 



Phase Expense 
$200,000 

$50,000 

$75,000 

$75,000 
$1 00.000 



Contractual Services Subtotal 



$500,000 



In Kind Contribution 

• Port Staff Time 



$100,224 



Total Security Assessment Budget 



$600,224 



48 



Attachment I 
Page 2 of 3 



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50 



Attachment II 




51 



,e Number: Attachment 1 1 1 

(Provided by Clerk of Board of Supervisors) PTge I f 2 

Grant Information Form 

(Effective January 2000) 

Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: Port Security Grant to execute Security Enhancement Program. 

2. Department: Port of San Francisco 

3. Contact Person: Taline Sanassarian, Government Affairs Telephone: 415-274-0417 

4. Grant Approval Status (check one): 

[X ] Approved by funding agency [ ] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $500,000 

6a. Matching Funds Required: $ 100,000 
b. Source(s) of matching funds (if applicable): Port of San Francisco 

7a. Grant Source Agency: Department of Transportation 
b. Grant Pass-Through Agency (if applicable): Transportation Security Administration 

8. Proposed Grant Project Summary: 

The Port of San Francisco manages assets consisting of 7 Vz miles of urban waterfront properties with 
a wide array of uses and facilities, including container and bulk cargo terminals, a cruise ship 
terminal, ferry and excursion passenger terminals, a substantial ship repair yard and drydock, multiple 
layberths for Maritime Administration vessels, commercial fishing harbors, power plants, the western 
bast of the Bay Bridge, the landmark Ferry Building, the Pacific Bell Park, numerous harbor facilities, 
and world-renowned tourist attractions. The Security Enhancement Program would allow a full 
assessment of Port security needs. The objectives would determine what security threats, 
vulnerabilities and risks the Port should make a priority to address. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: January 2003 End-Date: April 2003 

10. Number of new positions created and funded: None 

1 1 . If new positions are created, explain the disposition of employees once the grant ends? N/A 

12a. Amount budgeted for contractual services: $500,000 

b. Will contractual services be put out to bid? Yes 

c. If so, will contract services help to further the goals of the department's MBE/WBE 

52 



requirements? Yes 



Attachment III 



Page Z of Z 
d. Is this likely to be a one-time or ongoing request for contracting out? One-time 



13a. Does the budget include indirect costs? 



[]Yes 



[X]No 



b1 . If yes, how much? 

b2. How was the amount calculated? 

c. If no, why are indirect costs not included? 

[ ] Not allowed by granting agency [X ] To maximize use of grant funds on direct services 

[ j Other (please explain): Port will charge indirect cost of staff time against $100,000 Port contribution. 

14. Any other significant grant requirements or comments: 



"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 



[ X] Existing Site(s) 

[ ] Rehabilitated Site(s) 
[ ] New Site(s) 



[X ] Existing Structure(s) 

[ ] Rehabilitated Structure(s) 
[ ] New Structure(s) 



[ ] Existing Program(s) or Service(s) 
[ X] New Program(s) or Service(s) 



16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 



Comments: 



; /j) ' u(_ h<Aa^-» ^Cytt£i Offci ^ i\vxcLfcq 



(Name) 



Departmental or Mayor's Office of Disability Reviewer: 
Date Reviewed: j'o^L-- ^Q^ -> 

ie) r 



Department Approval: 



(Name) 



(Signature) 




(Title) 



6f '3>fua u>v^y 



53 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

Item 7 - File 02-1715 



Department: 



Department of Public Health (DPH) 
Department of Administrative Services, 
Division 



Real Estate 



Item: 



Location: 



Purpose of Lease: 



Lessor: 



Resolution authorizing a new lease of real property at 
1305 and 1309 Evans Avenue on behalf of the 
Department of Public Health, Children's System of Care 
Program and Family Mosaic Project. 

The proposed lease is for the rental space at 1305 and 
1309 Evans Avenue, located in the same building. 

To provide space for mental health services provided 
under DPH's Children's System of Care Program and 
Family Mosaic Project. 

John M. Holland, IV, Guy R. Holland and Barbara 
Holland. 



Lessee: 



City and County of San Francisco, acting by and through 
the DPH 



No. ofSq. Ft. and 
Cost Per Month: 



12,690 square feet. From the commencement date of the 
proposed lease, which is anticipated to be January 1, 
2003, until June 30, 2003, the City would pay a monthly 
rental rate of (a) $11,410 for the 8,390 square feet of space 
at 1309 Evans Avenue ($1.36 per square foot per month) 
and (b) $6,235 for the 4,300 square feet of space at 1305 
Evans Avenue ($1.45 per square foot per month), or a 
total of $17,645 per month for the entire 12,690 square 
feet of space at 1305 and 1309 Evans Avenue. Beginning 
on July 1, 2003, the City would pay a monthly rental rate 
of $18,401 for the entire 12,690 square feet of space ($1.45 
per square foot per month). 

However, since the DPH is currently leasing 8,390 square 
feet of space at 1309 Evans Avenue for the Family Mosaic 
Project, this proposed new lease would result in 4,300 of 
net new leased space for the DPH. 

Presently, the City is paying $1.36 per square foot per 
month for the 8,390 square feet of space at 1309 Evans 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

54 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



Annual Rent 
Increases: 



Avenue under an existing lease. For the six months in 
Fiscal Year 2002-2003, the rent under the proposed new 
lease would be $105,870 ($211,740 annually) for the total 
of 12,690 square feet of space at 1305 and 1309 Evans 
Avenue, or $17,645 per month, representing a combined 
average rate of $1.39 per square foot, for the six-month 
period from January 1, 2003 through June 30, 2003. On 
an annual basis beginning in FY 2003-2004, rent under 
the proposed new lease would be $220,812 for the 12,690 
square feet of space, or approximately $18,401 per month, 
representing a rate of $1.45 per square foot, or an 
increase of approximately 4.3 percent over FY 2002-2003. 



Rent would increase from an average rate of $1.39 per 
square foot in FY 2002-2003 to $1.45 per square foot in 
FY 2003-2004, representing a 4.3 percent increase in rent. 
The rate of $1.45 per square foot would remain in effect 
from July 1, 2003 through the remainder of the five-year 
lease term. 



Term of Lease: 



Five years, commencing upon substantial completion of 
tenant improvements, anticipated to be on January 1, 
2003, and expiring five years following the 
commencement date, or approximately December 31, 
2007. 



Right of Renewal: 



Utilities and 
Janitorial Services: 

Tenant 
Improvements: 



None. According to the terms of the proposed agreement, 
should the City continue to lease 1305 and 1309 Evans 
Avenue subsequent to the five year term, the lease would 
continue on a month-to-month basis either at the monthly 
rent in effect during the last month of the term of the 
lease or such rental as the Landlord and the City may 
mutually agree to in writing as a condition to Landlord's 
consent to such holding over on a month-to-month basis, 
subject to appropriation approval of the necessary funds 
by the Board of Supervisors. 



To be provided by the Landlord. 



Tenant improvements, as shown in Attachment I 
provided by DPH, would be fully paid by the Landlord at 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

55 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



an estimated cost of $10,000, according to Ms. Judy 
Schutzman of DPH. 



Source of Funds: 



Description: 



According to Ms. Schutzman, payments for the rent would 
be funded 60 percent from Federal and State revenues, 
and 40 percent from General Fund monies, subject to 
appropriation approval by the Board of Supervisors in the 
DPH annual budget. Of the total estimated annual cost of 
rent of $105,870 under the proposed new lease in Fiscal 
Year 2002-2003, 60 percent would be from State and 
Federal revenues or $63,522, and 40 percent, or $42,348, 
would be funded from the City's General Fund. Ms. 
Schutzman states in a memorandum to the Budget 
Analyst (Attachment II) that funds for this new lease are 
included in DPH's FY 2002-2003 budget as approved by 
the Board of Supervisors. Of the total estimated annual 
cost of rent of $220,812 in Fiscal Year 2003-2004, 60 
percent would be funded from State and Federal revenues 
or $132,487, and 40 percent, or $88,325, would be funded 
from the City's General Fund, subject to appropriation 
approval by the Board of Supervisors. 

The proposed resolution would authorize the DPH to 
enter into a new five year lease of 12,690 square feet of 
space at 1305 and 1309 Evans Avenue for the Children's 
System of Care Program and the Family Mosaic Program. 
Ms. Schutzman reports that both the Children's System of 
Care Program and the Family Mosaic Project provide 
outpatient mental health services, individual counseling, 
and family counseling to children residing in San 
Francisco from low income families by integrating the 
services offered by the DPH, the Department of Human 
Services, the San Francisco Unified School District, and 
the Juvenile Probation Department. 

As previously noted, DPH is presently leasing 8,390 
square feet of space at 1309 Evans Avenue for the Family 
Mosaic Project. 

According to Ms. Schutzman, the Children's System of 
Care Program is designed to provide services for children 
who are emotionally disturbed and in need of 
comprehensive mental health and social services. The 
Children's System of Care is designed to reduce the 
necessity for in-patient treatment and out-of-home 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

56 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



placement in a foster home or institution. Currently, the 
25 employees of the Children's System of Care Program 
occupy 2,500 square feet of space at 3801 Third Street, or 
100 square feet per employee. As discussed below in 
Comment No. 1, according to Ms. Schutzman, the DPH 
will continue to lease the 2,500 square feet of space at 
3801 Third Street to alleviate overcrowding at 3801 Third 
Street. The 25 employees of the Children's System of Care 
Program would move from 2,500 square feet of space at 
3801 Third Street to occupy 4,300 square feet of space at 
1305 Evans Avenue, an increase of 72 percent or 1,800 
square feet, providing an average of 172 square feet per 
employee. 

The Family Mosaic Project is an out-patient mental 
health program which focuses its efforts on severely 
emotionally disturbed children who are at high risk of 
out-of-home placement due to a behavioral disorder. 
Currently, the 42 employees of the Family Mosaic Project 
occupy the 8,390 square feet of space at 1309 Evans 
Avenue under a 10-year lease that commenced July 1, 
1993 at a cost of $1.36 per square foot per month. This 
existing 10-year lease terminates on June 30, 2003. 
Approval of the proposed new lease would result in the 
existing 10-year lease terminating approximately six 
months early, based on the anticipated commencement 
date of January 1, 2003 for the proposed new lease. Under 
the terms of the proposed new lease, the monthly rental 
rate under the existing lease of $1.36 per square foot per 
month for the same 8,390 square feet of space at 1309 
Evans Avenue would remain in effect until June 30, 2003. 
As previously noted, on July 1, 2003, the monthly rental 
rate for the 8,390 square feet of space at 1309 Evans 
Avenue would increase from $1.36 per square foot to 
$1.45 per square foot, an increase of approximately 6.6 
percent. 

Ms. Schutzman advises that the proposed lease of 12,690 
square feet, including the space at both 1305 and 1309 
Evans Avenue, would accommodate the 25 employees of 
the Children's System of Care Program to be relocated 
from 3801 Third Street and the 42 employees of the 
Family Mosaic Project presently located at 1309 Evans 
Avenue, or a total of 67 DPH employees each with an 
average of 189.4 square feet of space. As previously noted, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

57 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

approval of the proposed lease would increase the net 
amount of space leased by the City by 4,300 square feet at 
an annual cost of $74,820, or $1.45 per square foot. 

Comments: 1. Currently, 80 DPH employees occupy a total of 14,825 

square feet of space at 3801 Third Street. According to 
Ms. Schutzman, the 2,500 square feet of the 14,825 
square feet of leased space at 3801 Third Street that 
would be vacated by the 25 employees of the Children's 
System of Care Program, who would move to the proposed 
1305 Evans Avenue location, would be occupied by other 
DPH staff now occupying leased space at 3801 Third 
Street to assist in alleviating overcrowded conditions at 
3801 Third Street, according to Ms. Schutzman. Ms. 
Schutzman states that, while 55 DPH staff (80 employees 
less the 25 employees moving to 1305 Evans Avenue) 
would continue to occupy a total of 14,825 square feet at 
3801 Third Street, the average of 269.5 square feet per 
employee (14,825 square feet divided by 55 employees) is 
not representative of the state of overcrowding that exists 
at that location. Ms. Schutzman advises that the clients of 
DPH's Foster Care Mental Health Program and DPH's 
Child Crisis Unit, the two programs that would continue 

to-^eeupyMfe^47S25-^quare-Tfeet-T^^ 

Street, have specialized needs for interview space, a play 
area for the children, group therapy rooms, and separate 
waiting areas for foster and natural parents. Therefore, at 
least 3,400 square feet of the 14,825 square feet is used 
for such purposes, according to Ms. Schutzman. Ms. 
Schutzman notes in Attachment II, "We currently have 
Foster Care staff tripled up in offices designed for two 
people. In addition, staff is sitting in the hallways because 
there is no available space in offices. State and Federal 
law require absolute confidentiality in the delivery of 
mental health services. Meeting this requirement has 
become increasingly problematic at the 3 rd Street site." 

2. Ms. Schutzman reports that, under the terms of the 
proposed lease, the DPH would receive 16 designated 
parking spaces for DPH employees who use their 
privately owned vehicles to make field visits to homes and 
schools. 

3. Ms. Claudine Venegas of the Real Estate Division 
reports that the proposed monthly rental rate of $1.39 per 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

58 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



square foot in FY 2002-2003 and $1.45 for the balance of 
the five year term of this proposed new lease represents 
fair market value for comparable space in the area. 

4. The DPH has estimated total one-time costs associated 
with moving 25 employees of the Children's System of 
Care Program from 3801 3 rd Street to 1305 Evans Avenue 
of $4,000. The DPH has also estimated total one-time 
costs associated with minor office furnishings at 1305 
Evans Avenue of $5,000. According to Ms. Schutzman, 
these one-time costs totaling $9,000 will be absorbed in 
DPH's previously approved FY 2002-2003 operating 
budget. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

59 



Attachment I 



EXHIBIT C 



1305 Tenant Improvements 



1 . Paint walls in the Premises that are not presently wall papered with paint of a color and 
quality mutually acceptable to Landlord and Tenant. 

2 Carpet floors in interior of Premises that are presently carpeted (not those areas covered 

with linoleum or concrete) with carpeting of a color and quality mutually acceptable to Landlord 
and Tenant 

Install a partition with materials approved by City to divide the large office identified on 
Exhibit C-l attached hereto. 

4. Replace missing door hardware to match ether hardware in the Premises. 

5. Remove large interior window and replace with sheet rock, painted and finished to create 
a solid wall. 

Conceal the lower portion of the large duct in the rear portion of the Premises by boxing 
:: in with sheet rock, paint and finish said box. 

7. Provide ITVAC improvements as required to meet ASHRAE standards. 

8. Provide a three (3) day "bum off" after painting and carpet installation. 



60 




City and County of San Francisco 
Department of Public Health 
Community Health Services 

COMMUNITY MENTAL HEALTH SERVICES 



Attachment 11 
Page 1 ot 2 
Judith Schutzman, MPA 
Operations Managor 

13EQ Howard Street, 5th Floor 

San Francisco, CA 94103-2614 

(415)255-3405 FAX (415)252-3015 

Judy_Schulzman@sfdph.org 



MEMORANDUM 



Date: October 23, 2002 

To: Anna LaForte 

Budget Analyst's Office 

From: Judy Schutzman 

Subject: Evans Avenue Lease 

Community Mental Health Services is proposing to lease 4,300 square feet of additional 
space a 1305 Evans Street to house the Children's System of Care (CSOC) program. 
This unit is currently located at 3801 3 rt Street in space occupied by the Child Crisis 
unit and Foster Care Mental Health, When we first occupied the space at 3 rd Street, 
CSOC consisted of only 5 staff. It has since grown to 25 and can no longer be 
accommodated at3 ra Street. The Foster Care program has also grown by 10 staff and 
we have received new grants that 2dded 20 staff to the site. 

3801 3 rd Street is leased for $1.35 per square foot per month. CSOC occupies 
approximately 2,500 square feet. The vacated space will be used to relieve 
overcrowding. We currently have Foster Care staff tripled up in offices designed for two 
people. In addition, staff is sitting in the hallways because there is no available space in 
offices. State and Federal law require absolute confidentiality in the delivery of mental 
health services. Meeting this requirement has become increasingly problematic at the 
3 rd Street site. 

The new space at Evans will be used for staff counseling offices and for client group 
activities. The Family Involvement Team provides organized support groups for parents 
and youth that may involve 25-30 participants at a time, There is also a program that 
meets weekly to work with at-risk teens in an effort to keep them out of the juvenile 
justice system. 

Funds for this new lease (both the existing space and the new space) are included in 
the Department's 2002-2003 budget approved by the Board of Supervisors. Funds for 
moving expenses and minor furnishings are available in the current year apnropriations 
for material and supplies and other services. 



61 



P. 22 



— 2~- ~c-l^~ 11- 4£Hi". WO nut 14.1 >J.-> "■--> ■ »■' •■ 

Attachment II 
Page 2 of 2 



1305-09 Evans [page 2] 

The current lease of 1309 Evans Avenue is a 1 0-year lease that commenced July 1 , 
1 993 that will terminate on June 3D. 2003. We are proposing to terminate that lease S 
months early. 

P.ease let me know if you have additional questions. 



62 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

Item 8 -File 02-1716 



Department: 
Item: 



Grant Amount: 
Grant Period: 

Source of Funds: 

Required Match: 
Indirect Costs: 

Description: 



Airport 

Resolution authorizing the Airport Commission to accept 
and expend grant funds in the amount of $3,503,877 from 
the U.S. Department of Transportation's Federal Aviation 
Administration for the purpose of reimbursing the Airport 
for extraordinary operating costs incurred as a result of 
the events of September 11, 2001 as authorized by the 
Aviation and Transportation Security Act of 2001. 



$3,503,877 

September 12, 2001 through September 6, 
(approximately four years, see Comment No. 2). 



2005 



U.S. Department of Transportation Federal Aviation 
Administration (FAA) Airport Improvement Program 
(AIP) 

None. 

Indirect costs have not been budgeted by the Airport (see 
Comment No. 3). 

The proposed resolution would authorize the Airport to 
accept and expend $3,503,877 from the Federal Aviation 
Administration (FAA) Airport Improvement Program 
(AIP) for the reimbursement of expenditures for new, 
additional and revised security requirements resulting 
from the events of September 11, 2001. The U.Si 
Transportation and Security Act of 2001 included 
provisions for airports to be partially reimbursed by AIP 
grants for security expenditures mandated by the FAA or 
found by the FAA to be reasonable expenditures for new, 
additional and revised security measures. According to 
Mr. Kevin Kone of the Airport, the subject grant of 
$3,503,877 is the Airport's portion of $175 million in AIP 
grant monies the FAA has provided to partially 
compensate airports nationwide for direct costs associated 
with security requirements since September 11, 2001. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

63 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 

Budget: Attachment I is a summary of the budget contained in the 

Airport's application for the AIP funding for new, 
additional and revised security requirements from 
September 11, 2001 through September 30, 2002. 

Comments: 1. The Airport requested reimbursement for a total of 

$9,899,046 in actual and projected new, additional or 
revised security requirements from September 11, 2001 
through September 30, 2002 as shown in Attachment I. 
Mr. Kone reports that the FAA intended the AIP grant 
funds as partial reimbursement for airports nationwide. 
Mr. Kone further reports that of the $175 million in AIP 
grant monies allocated by the FAA nationwide for costs 
directly associated with security, the FAA determined 
that the San Francisco Airport's share was $3,503,877. 
Therefore, the Airport's remaining expenditures on 
security for the period from September 11, 2001 through 
September 30, 2002, estimated to be $6,395,169 
($9,899,046 less $3,503,877), have been expended from 
the Airport's operating budgets for FY 2001-2002 and FY 
2002-2003 as previously appropriated by the Board of 
Supervisors. 

2. The grant period is from September 12, 2001 through 
September 6, 2005, or approximately four years. 
According to Mr. Kone, the Airport believes additional 
funds for reimbursement of security expenditures from 
September 12, 2001 through September 30, 2002 may 
become available from the FAA. Therefore, Mr. Kone 
advises, the grant period is for a period of four years to 
enable the Airport to receive any additional grant monies 
that may become available. The acceptance and 
expenditure of any additional future grant monies for this 
purpose would be subject to Board of Supervisors 
approval. 

3. According to Ms. Cathy Widener of the Airport, 
indirect costs have not been budgeted in accordance with 
the Lease and Use Agreement between the City of San 
Francisco and the airlines using San Francisco 
International Airport. That Agreement was previously 
approved by the Board of Supervisors in 1981. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

64 



Memo to Finance Committee 

November 6, 2002 Finance Committee Meeting 



4. Attachment II to this report is the Department's Grant 
Information Form, including the Disability Access 
Checklist. 



Recommendation: 



Approve the proposed resolution. 




[arvey M. Rose 



cc: Supervisor Peskin 
Supervisor Daly 
Supervisor Maxwell 
Clerk of the Board 
Controller 
Ben Rosenfield 
Ted Lakey 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

65 



Attachment I 



Application Form for Additional AIP Funding ($175 million) For New 

Airport Security Requirements 

Per USDOT7FAA Program Guidance Letter 02-4 for Section 119 of the 

Aviation and Transportation Security Act (SI 147) 

(ACI-NA Standardized Form- Approved by the FAA, as providing information 

identified in PGL 02-04) 
Critical Submission Date: January 18, 2002 






Section I. 
Costs 



Eligible New, Additional or Revised Security Requirements & Direct 



(Definition - Costs that airports can specifically identify as being unique to new, additional, or revised security 
requirements imposed by the FAA or the TSA on or after September 1 1, 2001. Operational costs and small 
capital costs that have been or will be expensed are eligible. Amortized capital costs are not eligible for this 
special funding. Actual costs incurred after September 1 1 and estimated costs to be incurred in the future but no 
later than September 30, 2002 are eligible forfunding consideration. *Note: If airports have increased fees, 
including rates and charges, to users of airports, the applications should also reflect that action. FAA would expect 
that an airport should not receive a grant for costs that have been recovered unless the airport provides a plan for 
rebating these reimbursements back to airport users providing the reimbursement from FAA.) 



New, Additional, or Revised 
Security Requirement(s) 


Actual 
Direct 
cost(s) 
incurred 

9/11/01- 
1/18/02 


Estimated 
Direct 

cost(s) to be 
incurred 

1/18/02 - 
9/30/02 


Total Cost(s) 


Ha